Sensex falls for first time in 6 days, sheds 134 pts; Nifty ends at 10,923

NEW DELHI: Snapping five-session rally, domestic equity market succumbed to profit-booking to end lower on Tuesday mainly on account of losses in financial and auto stocks.

Global sentiment remained weak after the International Monetary Fund (IMF) cut its global growth forecast. Asian and European peers traded with losses, which dented sentiment back home even as IMF said that India would lead the global growth in 2019-20.

BSE Sensex slipped 137 points to 36,445 while NSE Nifty settled at 10,923, down 39 points.

HDFC duo, Mahindra & Mahindra and Maruti were among top Sensex drags. Whereas, Vedanta was the worst index performer, falling 3.63 per cent. M&M, Tata Steel, Bharti Airtel, Maruti and HCL Tech were among other stocks that lost ground.

Only nine stocks ended higher in the 30-share pack, with Sun Pharma leading. The scrip jumped 5 per cent after the pharma major issued a clarification that it has neither gave any loan nor guarantees to Suraksha Realty. The stock settled 4.54 per cent up at Rs 416.45 apiece on Tuesday.

Kotak Bank rallied for a second straight day on back of strong Q3 numbers and upbeat brokerage view on the stock. YES Bank remained unchanged by the end of trade.

Metal index was the worst hit in the sectoral space. It ended 2.31 per cent lower on fears of slowdown in China. Barring NMDC, all other constituents of the metal pack witnessed losses.

Telecom, auto and finance too ended in the red.

Shares of Prabhat Dairy gained traction after the stock reversed gains to fall 16 per cent. The stock after rising 20 per cent in opening session, soon gave up gains and settled 14.29 per cent lower after the Maharashtra-based company struck a definitive deal to sell its the milk-processing business for about Rs 1,700 crore through a slump sale.

“We are negative on the deal as promoters are selling 98 per cent of total company revenues, but Prabhat Dairy shareholders will only benefit for 29 per cent of the sale value. This is because Prabhat Dairy owns direct 29 per cent of the company being sold and promoters hold the rest through another firm Cheese Land Agro,” said Sameer Kalra, Equity Research Analyst and Founder at Target Investing.

BSE Midcap and smallcap indices too witnessed a tepid session, falling 0.09 per cent and 0.49 per cent, respectively.

Factors
Global sentiment weighs
Asian, European shares and US equity futures also fell after the IMF trimmed its global growth forecasts and a survey showed increasing pessimism among business chiefs as the rich and powerful gather at the World Economic Forum in Davos, Switzerland.

Weakness in rupee persists
After opening five paise higher in today's session, rupee resumed its fall in intraday trade and was trading at 71.40, down 11 paise, against the US dollar. The domestic unit slipped as much as 18 paise against the greenback.

China slowdown
China confirmed its slowest growth rate in nearly 30 years, which continued to weigh on the global market mood. China's official economic growth came in at 6.6 percent in 2018.

Expert Take
The market has mirrored the downswing in global equities which was impacted on concerns over global economic growth. Investors are worried over government's ability to meet the fiscal target of 3.3% of GDP in FY19, further dragging the sentiment. On the other hand, volatility may continue in the near term due to risk of populist measures in the interim budget and lower tax collection
- Vinod Nair, Head of Research, Geojit Financial Services

Amidst broad-based selling across the sectors and weak global cues, benchmarks opened the session in the red and continued sluggish trade till the afternoon session. Broad-based selling was witnessed in the market and all the sectors barring the Pharma were trading in the negative territory. The midcap and the smallcap indices continued to underperform its large peers. Crude prices saw a decline of more than 1.2% as it traded at $61.94. The market will keep a close eye on earnings and crude oil prices in the coming sessions
- Satish Kumar, Sr. Research Analyst, Choice Broking