Markets slump bucking global trend as RIL, HDFC Bank succumb to profit booking; Fed decision in focus

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Published: July 30, 2020 12:01 AM

RIL, which declined on profit booking, had earlier seen various brokerages, such as Kotak Institutional Equities, CLSA and Edelweiss Securities, downgrade or rerate its stock.

While benchmark Sensex declined 421.82 points or 1.1% to close at 38,071.13, Nifty declined 97.7 points or 0.86% to close at 11,202.85.While benchmark Sensex declined 421.82 points or 1.1% to close at 38,071.13, Nifty declined 97.7 points or 0.86% to close at 11,202.85.

Indian equities fell on Wednesday on profit-taking in heavyweight Reliance Industries (RIL), bucking the global trend, which was upbeat ahead of the Federal Open Market Committee (FOMC) meeting. While benchmark Sensex declined 421.82 points or 1.1% to close at 38,071.13, Nifty declined 97.7 points or 0.86% to close at 11,202.85.

Siddhartha Khemka, head-retail research, Motilal Oswal Financial Services, said, “On the domestic front, profit booking was witnessed in Reliance Industries and some of the IT and auto counters, post sharp run-up seen in the near term. Concerns over the rising number of Covid-19 cases, too, spooked the market after India’s tally went past 15-lakh today.”

RIL, which declined on profit booking, had earlier seen various brokerages, such as Kotak Institutional Equities, CLSA and Edelweiss Securities, downgrade or rerate its stock. In its report, Edelweiss Securities said certain risks lie on the downside. “This is not RIL’s first brush with euphoria — in1994 (India liberalisation), in 2000 (Y2K) and in 2008 (KG-D6/Refining). The current exuberance gives us a sense of déjà vu,” stated the Edelweiss Securities report. The stock price of RIL saw a steady decline throughout the trading session, it closed the day at Rs 2095.85 a piece — down 3.94%.

Foreign portfolio investors (FPIs) on Wednesday sold stocks worth $47 million, according to provisional data on the exchanges, whereas domestic institutional investors sold $67.4 million worth stocks. The futures and options segment witnessed turnover of Rs 22.62 lakh crore against the six-month average of Rs 14.9 lakh crore.

Globally, the markets were up on the anticipation of a positive outcome of the US Fed FOMC meet, which would impact Thursday’s trading session. The Dow Jones Mini futures were up five points at the time of going to press. European markets in the UK, Germany and France were up between 0.05% and 0.6%. Asian markets, too, had a positive trading session, with stock markets in South Korea, Hong Kong and China up in the range of 0.2% to 2.26%.

The biggest gainers on Nifty were Dr Reddy’s Laboratories, Tata Steel, IndusInd Bank, Grasim Industries and Bharti Infratel — up by 6.2%, 4%, 3.05%, 3.03%, and 2.94%, respectively. The biggest losers were RIL, Mahindra and Mahindra, HCL Technology, Nestle, as well as Hero MotoCorp, down by 3.9%, 2.68%, 2.53%, 2.49%, and 2.18%, respectively.

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