Mid-day Mood | Nifty, Sensex trade lower as auto, realty stocks bleed; IT bucks trend

Bajaj Auto, Hero MotoCorp, and M&M were top Nifty losers

Benchmark indices Nifty and Sensex extended morning losses and were deeply in the red after a sharp downturn in auto and realty stocks dented the sentiment massively. The IT index was the brightest spark in a dull market as heavyweights Infosys and Wipro will declare their Q2 earnings later today.

At noon, the Sensex was down 444.09 points or 0.54 percent at 81,057.27, and the Nifty was down 183.10 points or 0.73 percent at 24,788.20. About 1065 shares advanced, 2236 shares declined, and 93 shares unchanged.

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The broader market, mainly the mid and smallcap index, underperformed the benchmarks heavily as both slipped over a percent each. Given its YTD outperformance, market experts have expressed caution in the space citing elevated valuations. The India VIX, the barometer to assess market anxiety, flared up 3 percent to rise above the 13 levels.

Sectoral Trend 

All sectors barring IT tanked led by the Auto and Realty index. Two-wheeler major Bajaj Auto tanked over 11 percent after it left investors disappointed with its Q2 earnings. Realty majors such as DLF and Prestige Real Estates dragged the index lower.

On the other hand, the IT index was the only sector in the green, rising almost 1 percent. Gains in Infosys, Tech Mahindra, TCS and Wpro helped the index higher.

Also read: Hero Moto, TVS Motor shares see sharpest fall in 2 years on Bajaj Auto's Q2 miss

Fundamental View

"In India, the consolidation around Nifty 25000 level is likely to be extended with bouts of FII selling and DII buying. The re-emergence of outperformance of smallcaps driven by liquidity is again becoming a cause of concern," VK Vijayakumar, Chief Investment Strategist at Geojit Financial Services, said. "Coming days will witness lots of stock-specific action in response to Q2 results. Expect a positive response to the results of the financials. IT stocks can be bought on dips," he added.

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Technical View

"Two consecutive days of declines did cast doubts on the recovery moves being attempted since 8th October. However, the oscillator signals that gave us the confidence to enter such recovery moves in the initial phase itself, continue to persist, encouraging us to continue playing for 25,390 and more," Anand James, Chief Market Strategist at Geojit Financial Services, said. " Further, the support offered by 24,900 yesterday has fitted the recent swings into a parallel consolidation pattern, giving a launch pad for an upswing. We will keep our downside marker close, in the 24,900-830 region," he added.

Key Sensex Gainers

Infosys, Tech Mahindra, and SBI

Key Sensex Losers

M&M, Maruti Suzuki, and Axis Bank

Key Nifty Gainers

Infosys, Hindalco, and Tech Mahindra

Key Nifty Losers

Bajaj Auto, Hero MotoCorp, and M&M

Stock Moves

Bajaj Auto: Shares tanked over 12 percent after the company posted lower-than-expected net profit in the second quarter. This comes after it revised its growth outlook for two-wheeler sales in India to a modest 5 percent, at the lower end of its earlier estimate of 5-8 percent.

Kolte-Patil Developers: Shares zoomed 14 percent on October 17 as investors rejoiced at the company's solid Q2 business update. The real estate developer locked in its higher ever quarterly revenue in Q2.

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