India Markets closed

Banks drag Nifty, Sensex closes 99 points lower; midcap index down 1%

Uttaresh Venkateshwaran
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Last hour recovery helps Sensex end just 20 pts lower, Nifty above 10,750; pharma sees big gains

Defensives gain on a weak day of trade, but last hour fight by the bulls helps them trim losses.

Moneycontrol News

A sharp fall in banks, especially PSU banks, along with weakness in metals as well as midcaps ensured that the market ended the day on a lower note, despite a strong start. The Sensex has ended around 99 points lower, while the Nifty has managed to close well below 10,600.

Selloff in PSU banks was seen after Punjab National Bank fell around 12 percent as it clarified that the estimated amount of the scam could go up by another Rs 1,300 crore.

Other banks such as Oriental Bank of Commerce, State Bank of India and Bank of India fell around 2-8 percent. Select auto names were in focus despite an overall downtrend day. Hero MotoCorp ended as an index gainer at 2%.

"It was a volatile day on the bourses as stock markets in India oscillated between the positive and negative zones. While both the benchmark Sensex and the Nifty rose to their highest level since 8th February, 2018 in early trade, a bout of profit booking and selling pressure by cautious investors dragged the indices lower into negative territory to finally close the day with losses of nearly 0.25%. Investors also chose to adopt a more defensive stance with one eye on the US Federal Reserve Chairman Jerome Powell's highly-anticipated testimony, later in the global day," said Karthikraj Lakshmanan, Senior Fund Manager-Equities, BNP Paribas Mutual Fund in a statement.

Among precious metals, gold maintained its upward trend for the fourth day today, climbing Rs 190 to Rs 31,850 per 10 grams, largely in line with a firm trend overseas amid sustained buying by local jewellers. However, silver slipped by Rs 150 to Rs 39,550 per kg due to reduced offtake by industrial units and coin makers.

Traders said sentiment in gold remained strong following positive trend overseas on the back of a weaker dollar, while investors awaited US Federal Reserve Chair Jerome Powell's first congressional testimony for clues on the future pace of monetary tightening.

Among stocks, shares of cement majors, ACC and Ambuja Cements slipped 2-4 percent as the merger between the companies has been called at this juncture. A limitation in transferring mining assets has led to ACC and Ambuja Cements (ACL) from dropping plans to merge their business, at least for the present.

Meanwhile, Punjab National Bank fell below Rs 100-mark and closed around 12 percent lower. The state-run bank said the amount of fraudulent transactions could be Rs 1,300 crore more than the current estimate of about Rs 11,400 crore.

Jain Irrigation Systems added nearly ended half a percent lower after gaining 1 percent as its subsidiary has acquired Belgium-based Innovafood N V.

Shares of Coffee Day Enterprises added 1 percent as KKR Mauritius has sold 5.9 percent stake in the company.

Mercator surged 50 percent on the back of DGH approval for field development plan (FDP).

Meanwhile, State Bank of India ended over 2.50 percent lower. Macquarie has maintained its neutral stance on the stock.

Going forward, experts are asking investors to keep an eye on the consolidation in market.

“In the near term, the market participants will look forward to key economic data such as Nikkei Markit Manufacturing Purchasing Managers Index (PMI), Fiscal Deficit and Gross Domestic Product (GDP) scheduled to be released this week. We expect further consolidation in Smallcap and Midcap stocks before any upmove in the broader market indices,” Jayant Manglik, President, Religare Broking said in a statement.

In global markets, European stocks traded higher, as investors monitored the release of economic data and awaited Federal Reserve Chairman Jerome Powell's highly-anticipated testimony later in the session.

Asian markets closed mixed, with several indexes giving up early gains as mainland China stocks finished the day in negative territory. Mainland stocks closed lower after recording sharp gains in the last session, although small caps bucked the trend. The benchmark Shanghai composite lost 1.14 percent to close at 3,291.53 while the Shenzhen composite shed 0.34 percent.