Sensex touches fresh high, then slumps 416 points on tepid Q3 results, profit-booking

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Published: January 21, 2020 2:20:24 AM

The benchmark indices were dragged by heavyweights like Reliance Industries and banking stocks with the Sensex tumbling 416.46 points to close at 41,528.91.

share market, sensexhares of Bharti Airtel hit a 52-week high as the investor sentiment turned positive on the likely consolidation in the telecom industry and the possibility of a duopoly.

After touching fresh highs on Monday, the market benchmarks failed to keep the momentum and ended the day in the red on account of tepid corporate results, concerns regarding the fiscal deficit ahead of the Budget and profit booking.

The benchmark indices were dragged by heavyweights like Reliance Industries and banking stocks with the Sensex tumbling 416.46 points to close at 41,528.91. The broader Nifty50 declined 1.03% to close at 12,224.55 points. Bank Nifty shed 1.61% during the day, dragged by HDFC Bank and Kotak Mahindra Bank stocks.

Kotak Mahindra Bank, Reliance Industries (RIL) and ONGC were the top losers on the Sensex. Shares of RIL fell 3.08% to close at Rs 1,532 a piece. The group reported its results after market hours on Friday, with its performance not being in line with market expectations. “Standalone EBITDA declined 6% quarter on quarter to Rs 129 billion in 3QFY20, 10% below our estimate due to lower-than-expected refining margins and higher operating expenses,” Kotak Institutional Equities said in a note.

On the other hand, Powergrid Corporation, Bharti Airtel and ITC were the biggest gainers on Monday. Shares of Bharti Airtel hit a 52-week high as the investor sentiment turned positive on the likely consolidation in the telecom industry and the possibility of a duopoly. Broader midcap and smallcap indices, which have been gaining recently, could not maintain the rally. BSE Midcap declined 0.57% while BSE Smallcap fell by 0.39%.
According to a market expert, concerns regarding the fiscal deficit target have added to the concerns of the market. The expert said the market is skeptical about the government missing the fiscal deficit target since it is unlikely that the divestment targets will
be met.
“The markets will remain in the range of 12,400 as participants will not place any big bet till the Union Budget,” the expert said.

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