Chillicious Bureau It was a volatile day of trade on Dalal Street with the benchmark indices snapping 3-day gaining streak. However, midcap index gained for fourth day ending at record closing high.
The Sensex closed down 113.57 points or 0.4 percent at 28220.98 and the Nifty slipped 25.20 points or 0.3 percent at 8743.95. About 1721 shares advanced, 1158 shares declined, and 131 shares were unchanged.
Positive sentiment for India fuelled market rally in morning, driving it to 8800 but it soon faded away.
After Reserve Bank of India decided to cut rates in its bi-monthly monetary policy review yesterday, International Monetary Fund has raised India’s growth forecast to 7.6 percent from 7.4 percent for 2016 and 2017. Improvements in trade, policy actions and reforms have led to the rise in forecast. IMF has also retained global growth forecast for 2016 at 3.1 percent and for 2017 at 3.4 percent. The international body has warned of economic stagnation on back of subdued global growth following weakness in the US as well as Brexit vote in Europe.
Analysts are bullish on India but say US elections and September quarter earnings will be crucial for market now. Timothy Moe, Goldman Sachs said, “We remain overweight India as cyclical upturn and profit recovery appears underway. We expect Indian corporate earnings to grow 10 percent this year and 14 percent next year, highest within the region.”
“Stocks with a high proportion of US revenues may underperform. The buy-rated stocks that are on our conviction list include HDFC Bank and Yes Bank in India,” he added.
Meanwhile steel stocks rallied on government boosters as minimum import price (MIP) on 66 steel products is extended by another two months to protect the industry against cheap imports. The 66 products include semi-finished products of iron or non-alloyed steel, flat rolled products of different widths, bars and rods. Stocks like Hindustan Zinc, Hindalco, Jindal Steel, JSW Steel and Tata Steel gained over 1 percent from previous close.
Metal index was up around 0.7 percent from previous close. HUL, Tata Motors, Asian Paints, L&T and NTPC were other top gainers in the Sensex.
Banks, IT and pharma stocks were under pressure with ONGC, Axis Bank, Bajaj Auto, M&M and Hero MotoCorp were major laggards in the Sensex.