While FMCG were one of the big laggards through the day, weakness among banks, along with IT, pharmaceuticals, energy, and infrastructure sectors also weighed on the indices.
It was an anti-climax for the market on Monday, as benchmarks closed nowhere near to the levels they had opened at. In fact, a sharp selloff in the last hour erased all the gains, with the market closing at low points of the day. The Nifty managed to give up 11,600, while the Sensex fell around 300 points.
While FMCG were one of the big laggards through the day, weakness among banks, along with IT, pharmaceuticals, energy, and infrastructure sectors also weighed on the indices. Investors also rushed to sell midcaps, as the Nifty Midcap shed around 0.3 percent, after rising a percent in the morning.
Both Sensex and the Nifty began the week on a strong note as investors bet positively on the strong data for June quarter. The number came in at 8.2 percent for Q1 of FY19, higher than what the Street had anticipated. However, possible concerns around trade wars and a weaker rupee spooked investors, sending them in a selling mode.
Investors may have also reacted negatively protests by foreign portfolio investors in relation to know your customer (KYC) norms set by market regulator SEBI in its April 10 circular. They have argued that no consultations were from stakeholders before framing these. CNBC-TV18 spoke to experts who said that USD 70 billion would be impacted by this circular out of USD 450 billion that FPIs mobilise currently.
Among stocks, the likes of ITC and HUL saw weak trades, which put downward pressure on the FMCG index, while ICICI Bank, Kotak Mahindra and Axis Bank pushed the market lower.
At the close of market hours, the Sensex fell 332.55 points or 0.86% at 38312.52, while the Nifty ended lower by 98.10 points or 0.84% at 11582.40. The market breadth is negative as 1,347 shares advanced, against a decline of 1,409 shares, while 199 shares were unchanged.
Wipro, Adani Ports and Dr Reddy’s were the top gainers, while HUL, Power Grid, and Bajaj Finance lost the most.
"It turned out to be a tricky day on the bourses as a confluence of negative as well as positive macro-economic data and negative global cues confounded investors and kept wider trends at bay. However, markets finally succumbed to selling pressure to close the day with losses of over 0.50%. The Nikkei India Manufacturing Purchasing Managers' Index (PMI) fell to 51.7 in August , 2018 from 52.3 in July, 2018," Abhijeet Dey, Senior Fund Manager-Equities, BNP Paribas Mutual Fund said in a statement.
Stocks in the news
Shares of Wipro ended 2 percent higher after it signed a largest deal worth USD 1.5 billion and completed the buyout of Alight HR Services India.
Meanwhile, shares of ICICI Bank fell over 2.5 percent as investors turned wary of reports around Chanda Kochhar and family. A media reported indicated that a probe will be conducted on all property dealings around Chanda Kochhar and her family.
Auto stocks were in focus as investors reacted to sales data for August. Bajaj Auto’s shares rose over a percent as investors reacted to strong sales data for August. Maruti Suzuki slipped 1 percent in the morning trade on Monday after company reported weak sales number for the month of August 2018.
There was a rally in a few infrastructure names as well. Ramky Infrastructure added 2 percent as it sold its entire shareholding in NAM Expressway for Rs 140 crore. Larsen & Toubro (L&T) fell one-third of a percent after rising 1.5 percent intraday even as the company's construction arm won orders worth Rs 2,654 crore across various business segments. Hindustan Construction Company (HCC) gained 5 percent as the company’s board is said to consider fund raising on September 5.
Shares of ice-cream maker Kwality was locked at 5 percent upper circuit as the Board approved an FII investment limit up to 74 percent.
Lastly, United Breweries was down 1 percent after research house Kotak Securities maintained a sell call with a target price of Rs 1,100.
Markets in Europe were slightly lower, amid concerns of trade war between US and China. Stoxx 600 was down around 0.1 percent.
Meanwhile, markets in Asia were ended in the red as trade war concerns dominated cues here as well. Canada and the US failing to come to a trade agreement also affected moves. Nikkei 225 ended in the negative territory, down by 0.69 percent at 22,707.38."We remain positive on the Indian equities over medium to long term, however in the near term one should remain cautious as further correction cannot be ruled out, considering a sharp upmove witnessed over the last couple of weeks. Additionally, global developments on trade war and movement of crude oil prices will be on market radar. Any correction in fundamentally sound companies with strong growth prospects should be considered as a good buying opportunity for investors," Jayant Manglik, President, Religare Broking said in a statement.