Closing Bell: Nifty gives up 11,700 a day before F&O expiry, Sensex down 173 points; midcaps outperform

A sharp selloff in the last hour of trade weighed on equity benchmarks on Wednesday, with the Nifty giving up 11,700-mark. Weakness among giant index names such as Reliance Industries, HDFC Bank, and Infosys, among others, dragged the market lower as well.

Banks had a negative impact on the market, along with energy stocks, infra, IT and pharmaceutical names. However, PSU banks and metals tried to offset the losses, but bulls had the tide in their favour.

However, there was a strong upmove in the broader markets, with the Nifty Midcap index ending just around half a percent higher. The index had managed to soar a percent during the day’s trade.

Rise in crude oil prices due to withholding of supply by Iran as well as a depreciating rupee too added to the negative sentiment. The Indian currency managed to fall to a fresh record low of 70.57 per US dollar. Analysts that Moneycontrol spoke to attributed this to the month-end dollar demand by oil companies.

“As such, all other factors are supportive of the currency. It could see appreciation after one or two days once this demand is out of the market,” Rushabh Maru, Research Analyst at Anand Rathi Shares and Stock Brokers told Moneycontrol. For the very short term, he expects support to be around 70.20/USD and resistance around 70.75/USD.

At the close of market hours, the Sensex closed 173.70 points or 0.45% lower at 38722.93, while the Nifty fell 46.60 points or 0.40% at 11691.90. The market breadth is negative as 1,275 shares advanced, 1,415 shares declined, while 172 shares were unchanged.

ONGC, SBI, Bajaj Finance and UPL are the top gainers, while Coal India, RIL and Power Grid have lost the most.

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Shares ofIndiabulls Real Estaterose 9 percent as company promoters increased their stake in the company.

The company's promoters have increased their stake from 36.9 percent in the quarter ended March 2018 to 38.6 percent in the quarter ended June 2018.

At 14:21 hrs Indiabulls Real Estate was quoting at Rs 152.45, up Rs 9.80, or 6.87 percent on the BSE.

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Shares ofCadila Healthcarefell 2.5 percent afterUS health regulator has issued five observations after inspection of its subsidiary Liva Pharmaceuticals' injectables manufacturing facility.

"This was a product specific pre-approval inspection. It concluded with 5 observations. Liva will respond toUnited States Food and Drug Administration (USFDA) within 15 days. It may be noted that at present Liva does not export any products to the US market," Cadila Healthcare said in a filing to BSE.

The injectables facility is located at Vadodara.

USFDA conducted the inspection from August 20-28. Liva is a 100 percent subsidiary of Cadila Healthcare.

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Consolidation has continued on the market throughout the morning and the noon session as well. The Nifty is managing to hold 11,700, while the Sensex is down around one-tenth of a percent.

The Sensex is down 42.73 points or 0.11% at 38853.90, while the Nifty is down 17.00 points or 0.14% at 11721.50. The market breadth is narrow as 1,232 shares advanced, against a decline of 1,210 shares, while 150 shares were unchanged.

Losses in IT, infrastructure, energy, and FMCG names are being offset by metals, PSU banks, and automobiles. The midcap index has maintained its outperformance over benchmarks, up around 1 percent.

ONGC, State Bank of India, and UPL are the top gainers, while Coal India and IndusInd Bank have lost the most.

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The tax incidence on the settlement of derivative contracts by taking physical delivery of securities is set to increase tenfold when compared to those who settle in cash, according to a report in The Economic Times.The Bombay High Court was apprised by the Central Bureau of Direct Taxes (CBDT) that physical settlement in the equity and derivatives segments will attract the same securities transaction tax.

The delivery of shares worth Rs 1 crore will now be taxed Rs 10,000 as opposed to Rs 1,000 previously.

A two-member bench comprising of Justice MS Karnik and BR Gavai had sought an explanation from the taxman following a petition filed by members of the National Stock Exchange (NSE). The ambiguity over the tax liability on securities transactions came to the fore after the exchange moved 46 stocks in the futures and options segment to the compulsory delivery category.

This change was made applicable since July. The market regulator also passed an order whereby equity derivatives were ordered to shift to physical settlement in a staggered manner.