Equity benchmarks extended losses on Monday, with the Sensex shedding 258 points intraday, tracking correction in global peers after the US President Donald Trump failed to get healthcare reform passed. The news of SEBI order on Reliance Industries and the forecast of Monsoon below normal level were other reasons for selling pressure in the market.
The 30-share BSE Sensex was down 184.25 points at 29,237.15 and the 50-share NSE Nifty fell 62.80 points to 9,045.20, on top of 0.6 percent loss in previous week.
Experts turned cautious after recent rally, citing economic weakness in country. They expect the consolidation to continue for couple of days on account of F&O expiry this week.
“Combination of underlying economic weakness plus the stellar rally makes us very uncomfortable about chasing the market. I have been consistently telling clients over the last three months that there is no point in chasing the rally in an economy where there is underlying sluggishness,” Saurabh Mukherjea of Ambit Capital says.
Jayant Manglik of Religare Securities has reiterated its advice to limit leveraged positions and keep them hedged. At the same time, trader shouldn’t go against the trend and maintain buy on dips approach, he says.
Broadly, he feels Nifty will consolidate further within 9000-9300 in near future prior to next directional move.
The broader markets slightly outperformed benchmarks, with the BSE Midcap index falling 0.3 percent. About 1630 shares declined against 1168 advancing shares on exchange.
Global equity markets were lower today as investors adopted a cautious tone on the back of US President Donald Trump’s surprise failure to deliver swift health-care reform. However, gold rose to a one-month high on weakness in dollar.
Meanwhile, Jatin Singh of skymetweather.com says monsoon this year is expected to be below normal level. He expects the monsoon at 95 percent with an error margin of plus or minus 5 percent.
The Indian rupee closed at 65.03, the highest level against US dollar since October 28, 2015, up 37 paise over previous settlement.
All sectoral indices closed in red. Nifty Metal index lost the most, down more than 2.5 percent following correction in commodity prices. Tata Steel and Hindalco Industries slipped 3 percent each.
Healthcare and IT stocks were also under pressure as indices lost 1 percent each on concerns over rising rupee. Sun Pharma, Lupin and Wipro fell more than 1 percent while TCS and Infosys declined 0.3-0.6 percent.
Reliance Industries was top contributor to Sensex’ loss, down 2.76 percent after the Securities and Exchange Board of India, on Friday, banned the company and 12 others from equity derivatives trading for one year.
(Disclosure: Reliance Industries owns Network 18 that publishes Chillicious.com).
HDFC Bank, Asian Paints, Tata Motors and ONGC fell 1-2 percent. However, HDFC (up 0.87 percent) and ITC (up 0.3 percent) managed to limit some market losses.
State Bank of India was biggest gainer among Sensex stocks, up 1.2 percent as the bank has initiated process for stake sale in its insurance subsidiary via IPO. Even merger of five associate banks with it will be effective from April 1.