An evening walk down D-St: Skymet forecast and profit booking ahead of MPC spoil the party

A day of ups and down for D-Street. The S&P BSE Sensex and Nifty50 touched fresh record highs on April 3 supported by stable global cues, but the momentum didn’t last long as traders preferred to book profits at higher levels.

The S&P BSE Sensex snapped its 4-day winning streak and fell by about 400 points from its record high of 39,270.14 while the Nifty50 also failed to hold on to 11,700 and fell by more than 100 points from its life high of 11,761.

The final tally – the S&P BSE Sensex closed 179 points lower at 38,877 while the Nifty50 dropped 69 points to close at 11,643. The Nifty50 took support at its 5-days EMA placed at 11,629.

Traders preferred to book profits ahead of the outcome of the RBI Monetary Policy Committee meeting's outcome on April 4. Skymet forecast on monsoon rains could have also afected the sentiment.

Skymet Weather has predicted that monsoon rains will be below normal this year. The reason behind a deficient monsoon will be the developing El Nino phenomenon, which means a rise in temperature in the equatorial Pacific Ocean.

All sectoral indices ended in the red with the S&P BSE Oil & Gas index leading losses largely on account of high crude oil prices, followed by BSE Telecom index that was down 1.5 percent, and the Capital Goods index which fell 1.3 percent.

The broader market indices underperformed as BSE Midcap & Smallcap closed with losses of 0.8 percent, and 0.9 percent, respectively.

Experts feel that the consolidation is likely to continue in the near-term, and RBI monetary policy would provide further direction to the markets.

“We have seen a strong run-up in indices and ahead of the RBI and Skymet forecast on monsoon could have fueled fear among participants that led to profit taking in the market. However, investors should take the Skymet prediction with a pinch of salt because it is still not defined as a warning,” Yogesh Mehta, VP, retail research at Motilal Oswal Securities told Moneycontrol.

“In terms of RBI event, most market participants expect a rate cut of 25 bps that is already priced in. It looks like traders preferred to book profits rather than booking profits once the event is over,” he said.

Stocks in news:

Shares of Suzlon Energy declined more than 4 percent after CARE ratings revised the ratings of the company.

Larsen & Toubro fell 2 percent after the company said it will sell its stake in the joint venture with Kobe Steel.

Amara Raja Batteries fell 6 percent after the agreement between Galla Family and Johnson Controls (JC) was terminated.

Surana Telecom tumbled more than 5 percent after the company divested 100 percent equity stake in its wholly owned subsidiary Globecom Infotech Private Limited.

Kamdhenu rallied nearly 17 percent after the company more than doubled the production capacity of its steel plant in Bhiwadi, Rajasthan.

Jet Airways slipped 5 percent after an additional 15 airlines were grounded, making it the smallest operating pan-Indian carrier.

Global Updates:

European markets are trading higher as investors are monitoring developments in US-China trade talks.

Asian markets closed higher on April 3 as Hang Seng index gained 1.19 percent at 29,986.39, Shanghai Composite added 1.24 percent to 3,216.30 and Nikkei rose 0.97 percent at 21,713.21.