Benchmarks end flat on strong profit-booking

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Published: May 12, 2020 7:55 AM

The benchmark Sensex was down 81.48 points or 0.26% to close at 31,561.22.

india stock market, sensex,nifty, HDFC Securities, Foreign portfolio investors, HUL, Covid-19 cases in India, market newsThe market was dragged by banking and financial stocks, which remained under pressure for most part of Monday’s trade.

India’s stock markets ended flat on Monday after shedding early gains. The market had started strong amid positive global cues but the last one hour saw strong profit-booking, which dragged down some of the index heavyweights.

The benchmark Sensex was down 81.48 points or 0.26% to close at 31,561.22. The 50-share index Nifty was down 12.30 points or 0.13% to lose at 9239.2.

The Nifty50, which climbed 110.7 points during the day’s trade, erased its gains by the end of the session. The market was dragged by banking and financial stocks, which remained under pressure for most part of Monday’s trade. Concerns over rising slippages in banks kept these stocks under pressure throughout the second half. Deepak Jasani, head of retail research, HDFC Securities, said, “The benchmark indices failed to sustain early gains and ended with marginal loss after profit-booking in the afternoon erased all the intraday gains.”

According to the data on NSE, the F&O segment of the market witnessed volumes worth Rs 8.29 lakh crore against the six-month average of Rs 14.2 lakh crore. On the other hand, the cash market saw volumes worth Rs 46,613 crore against the six-month average of Rs 40,898 crore. Market experts said the rising Covid-19 cases in India have also made the investors tense. Going forward, the market is likely to keep its focus on a fiscal stimulus, which is anticipated this week. Siddhartha Khemka, head — retail research, Motilal Oswal Financial Services, said, “In the near-term, we expect the market to swing either ways depending upon the spread and intensity of Covid-19 cases, development around vaccine and incremental government or regulatory actions to restart the economy.” According to him, the investors would also track developments around the US-China trade tensions, key economic data and results of heavyweights.

Foreign portfolio investors (FPIs) who were sellers throughout March and April had turned into buyers as a chunk of shares of HUL were put on the block. On Monday, FPIs bought stocks worth $70.6 million, according to provisional data on the exchanges, whereas domestic institutional investors sold stocks worth $108.2 million. FPIs have bought stocks worth $2.38 billion till May 8. According to a report by Jefferies, large deals such as that in HUL, RIL, Kotak Mahindra Bank, among others, have raised the issue of high equity supply in the weak market conditions.

“A mitigating factor is the potential increase in India weighting in MSCI EM as the default FII limit has been raised to the sectoral cap. While some companies might choose to bring the FII limit lower, we estimate that it should still warrant an approx 50 basis points increase for India in MSCI EM or passive inflows of more than $1 billion,” Jefferies said, adding that active benchmarked flows might be much larger but could take longer to take effect.

The biggest losers on the Nifty were ICICI Bank, BPCL, Dr Reddy’s Laboratories, Kotak Mahindra Bank and Hindustan Unilever, down 4.6%, 3.1%, 2.9%, 2.5%, and 2.1%, respectively. The biggest gainers were Hero MotoCorp, Tata Motors, Bharti Infratel, Bajaj Auto and Maruti Suzuki, up by 6%, 5.92%, 5.91%, 5.8%, and 5.7%, respectively.

Automobile stocks dominated the list of winners after the reports that certain auto dealerships have started opening. Sectorally, the biggest losers were Nifty Private Bank, Nifty Bank, Nifty Financial Service, Nifty PSU Bank and Nifty Pharma. The biggest gainers were Nifty Auto, Nifty Media, Nifty IT, Nifty Metal and Nifty Realty. Broader market indices were trading mixed with Nifty Midcap up by 0.5% and Nifty Smallcap was down by 0.1%.

Meanwhile, markets in Asia ended the day higher after economies around the world have started exiting their lockdowns. Stock exchanges in Singapore, Taiwan and Hong Kong were up between 0.7% to 1.5%. European markets were down with bourses in the UK, Germany and France down between 0.3% and 1.6%.

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