Brushing aside rate cut hopes fulled by soft inflation and IIP data, the benchmark BSE Sensex today fell by 45 points to 27,206.06 on sell-off in export-oriented stocks after rupee surged over 20 paise against dollar.
Sentiment continued to remain bearish on concerns over muted Q4 earnings, delay in key reform bills in Parliament and forecast of a subdued monsoon, brokers said.
German and US bonds yields soaring to their highest in over five months too impacted sentiments here, they added.
A government data today showed Wholesale Price Index (WPI) inflation declined to a new low of (-) 2.65 per cent in April.
Sensex slipped below the crucial 27,000-mark in early trade to hit a session low of 26,948.62 as heavy-weights succumbed to profit-booking after yesterday’s gains.
However, gains in Hindalco, SBI, Bajaj Auto and Tata Steel stocks trimmed most of losses and the index settled with a fall of 45.04 points or 0.17 per cent at 27,206.06.
The NSE Nifty also edged lower by 11.25 points or 0.14 per cent to end at 8,224.20. Intra-day, it cracked the 8200-mark to touch a low of 8,137.30.
Stocks of Vedanta suffered the most among Sensex constituents by falling 1.65 per cent.
Losses in Sun Pharma, HDFC, ITC, ICICI Bank, RIL, L&T, Tata Motors and Axis Bank too weighed down on the index.
Hindalco, however, gained the most by rising 2.92 per cent, followed by SBI, Bajaj Auto, Tata Steel, M&M, ONGC and Maruti Suzuki.
Of 30-Sensex stocks, 12 stocks ended lower, while 18 finished in positive zone.
However, broader market managed to fare better. “The mid-cap and small-cap indexes outperforming the broader markets closed up around 0.89 and 0.92 per cent, respectively,” said Alex Mathews, Head Research at Geojit BNP Paribas Financial Services.
Sectorally, the BSE IT index fell the most by losing 0.71 per cent as Infosys, TCS and Wipro plunged by up to 1.09 per cent on strengthening of the rupee against US dollar.
At the forex market, rupee was trading 19 paise higher at 63.81 against the dollar (intra-session).
Market Outlook by Vinod Nair, Head-Fundamental Research, Geojit BNP Paribas Financial Services
As far as domestic factor is concerned in the near-term, risk is to understand the extent of further earnings downgrade. FY16 earnings continued to be high at more than 20%. Post the improved government financial, Governments spend is likely to increase in the medium-term. India’s economy will be better in the medium-term led by real incomes and higher government spending. Hence the big question is timing which is always never know, thus we recommend to be structurally positive from wait and watch strategy earlier, suggest sectors like Banks, IT (valuation is attractive) with higher mix. Latest CPI trajectory provides scope to cut rate by the next RBI meet in June 2nd. May be the point to ponder is to have 25bps or 50bps cut. This is likely to provide a support to the range bound correction led by FIIs on global volatility.
Market Wrap Up by Alex Mathews, Head Research, Geojit BNP Paribas Financial Services
Markets today opened with a marginal uptick and later witnessed heavy sell-off and Nifty tested an intraday low at 8137.30 and closed at 8224.20 without much triggers.Weak US retail sales data kept the dollar under check helped the Indian rupee and Indian stocks to a certain extent..
The wholesale inflation data came out today, which stood at -2.65% in the month of April as compared to 5.55% in the same month last year. The data was at -2.33% in March. The food inflation stood at 5.73% in the month under review as against 6.31% in the previous month.
Nifty today closed at 8224 down around 11 points. The market breadth stood positive as there were seen 1477 stocks advancing against 1216 stocks declining. India VIX is still holding at around 20.70, indicating uncertain market condition.
The mid cap and small cap index were outperforming the broader markets, closed up around 0.89% and 0.92% respectively.
Realty and Oil & gas were the gainers in the sectorial front, closed up around 1.07% and 1.02% respectively. The losers on the other end were IT and Capital goods which ended down around 0.71% and 0.41% respectively.
In the stocks’ front, the major gainers were Asian Paint and PNB which closed up around 4.26% and 3.49% respectively whereas the selling was seen in Lupin and VEDL closed down around 3317% and 1.60% respectively.
The FIIs were sellers in the cash market segment on 13 May 2015, Wednesday, sold shares worth Rs 71.2 crore. The DIIs on the other hand were buyers on 13 May, bought shares worth Rs 254 crore in the capital markets segment.
The European markets were little changed and the US index futures were trading in positive territory.
Tomorrow companies like Zuari Global, Videocon, Scheinder, Tata Coffee, Amrutanjan, JSW steel, Torrent Pharma, Orient Hotel, Dena Bank, HT Media, JK Lakshmi, BBL, IL&Fs Trans and Purvankara may announce their earnings.