Sensex snaps 5-day winning streak; financials drag, IT firm

Moneycontrol Bureau

The market snapped five-day winning streak on Tuesday with the Nifty closing below the 6100-level on profit booking in financials. Investors  seemed to have turned cautious ahead of October 17 deadline for US debt ceiling.

The Sensex was down 59.92 points to 20547.62, and the Nifty lost 23.65 points to 6089.05 while the broader markets’ loss was higher compared to benchmarks.

BSE Midcap and Smallcap indices fell around a percent as declining shares outnumbered advancing ones by 1423 to 976 on the Bombay Stock Exchange.

Gautam Trivedi of Religare Capital Markets recommends long-term investors to be cautious because he feels that the market has run ahead of its fundamentals.

According to him, the underlying economy is still not showing signs of improvement as inflation remains fairly high, so another repo rate hike by the Reserve Bank of India might hurt the economy further.

Financials were the main laggards in today's trade with the BSE Bankex falling 2.7 percent on fears of another repo rate hike in RBI’s second quarter monetary policy on October 29 and rising non-performing assets.

Country's largest lenders State Bank of India, ICICI Bank and HDFC Bank were down 2 percent each.

HDFC Bank's net profit rose 27 percent (above forecast) sequentially to Rs 1,982 crore while its net interest income grew lower-than-expected 15.3 percent to Rs 4,476 crore during September quarter as against analysts’ forecast of Rs 1,963 crore and 4,576 crore, respectively. Non-performing assets of the bank increased during the quarter while net interest margin fell by 30 basis points to 4.3 percent in second quarter from 4.6 percent in June quarter.

However, technology stocks continued to see buying interest on hopes of strong earnings during July-September quarter. TCS gained 0.16 percent while Wipro and Infosys advanced 0.8 percent each.

TCS, which annnounced its earnings after market hours today, beat street estimates with net profit rising 23.86 percent sequentially to Rs 4,702 crore during July-September quarter. Rrevenues jumped 16.6 percent quarter-on-quarter (up 34.3 percent year-on-year) to Rs 20,977 crore, driven by highest volume growth in last nine quarters.

Hindalco Industries gained 1.5 percent after recouping losses. The stock had fallen 5 percent intraday after CBI filed FIR against Kumar Manglam Birla, Nalco, Hindalco and former secretary coal PC Parakh.

Among others, Bharti Airtel and Tata Steel shares rallied 2-3 percent.

Meanwhile, the rupee closed at 61.84 against the US dollar, down 29 paise from previous close.