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The market took a breather on Tuesday after hitting fresh record highs in previous session and ended sharply lower, tracking global weakness ahead of FOMC meeting tonight and Union Budget on Thursday.
All NSE sectoral indices closed in the red, but oil retailers bucked the trend post IOC earnings and further fall in crude oil prices.
It was a profit booking day for the market. The 30-share BSE Sensex broke 36,000-mark intraday, before closing down 249.52 points or 0.69 percent at 36,033.73 while the 50-share NSE Nifty was 80.70 points or 0.73 percent lower at 11,049.70.
Reliance Industries (down 1.46 percent), HDFC (1.53 percent), ICICI Bank (1.23 percent), Infosys (1.04 percent) and TCS (1.44 percent) pulled the Nifty below 11,100 levels.
Experts expect the volatility to remain high in the next few trading sessions considering key events like the US Fed policy meet and Union Budget at home.
“The government is expected to present a balanced budget being its last full budget before general elections; however any negative surprise on the fiscal deficit target could dampen investor sentiments. Thus, we advise to remain selective in stocks and avoid over leveraging for the near term,” Jayant Manglik, President, Religare Broking said.
Nikhil Kamath, Co-Founder and Head of Trading, Zerodha also said ahead of the Budget 2018, it might not be prudent to add large positions at this point. “We continue to remain neutral at this juncture and would not recommend entering fresh longs at this point.”
The broader markets fell for fourth consecutive session today, with the Nifty Midcap index declining 0.8 percent and BSE Smallcap falling 1.34 percent. About three shares declined for every share rising on the BSE.
On the global front, Asian indexes ended lower, tracking negative lead from Wall Street. Japan’s Nikkei, China’s Shanghai Composite, Hong Kong’s Hang Seng and South Korea’s Kospi fell 1 percent each. European markets – France CAC, Germany DAX and Britain FTSE were down 0.3-0.6 percent at the time of writing this article.
Nifty Bank, Auto, IT, Metal, Pharma and Realty indices were down 0.4-1 percent.
Tech Mahindra was down 0.3 percent despite stellar Q3 earnings. Majority of brokerage houses remained positive on the stock and expect the stock to give up to 23 percent return in next 12 months post earnings.
Oil retailer IOC gained 4.15 percent after showing more than 100 percent growth in Q3 profit and margin expansion of 390 absis points compared to previous quarter. Gross refining margin for the quarter ended December 2017 at USD 12.30 a barrel was also far ahead of CNBC-TV18 poll of USD 8.20 a barrel. The state-run oil company recommended bonus share issue in the proportion of one share for every one share held.
HPCL also rallied 4.76 percent and BPCL was up 3.36 percent. Another reason for rally in share prices was further fall in crude oil prices. Brent crude oil futures were trading at USD 69.27 a barrel, down 0.27 percent at the time of writing this article.
Kotak Mahindra Bank, Bajaj Finance, Axis Bank, Eicher Motors, Adani Ports, Bharti Infratel and Asian Paints lost 2-3 percent.
TVS Motor Company was down 1 percent despite good Q3 earnings. Profit grew by 16.3 percent and revenue increased 23.5 percent YoY.
Among midcaps, Wockhardt, Just Dial, PC Jeweller, Fineotex Chemicals, Indiabulls Real Estate, Havells India, Himadri Chemicals, Tata Coffee, Bhushan Steel, Somany Ceramics and Emami were down 3-14 percent whereas Gruh Finance, KPIT Technologies, LG Balakrishnan and Balkrishna Industries rallied 4-8 percent.
On debut, Amber Enterprises closed at Rs 1,237.25 on the BSE, showing a whopping increase of Rs 378.25 or 44.03 percent over issue price of Rs 859 per share.