Sensex declines 450 pts from day's high, Nifty below 25,650: Weak global cues among key reasons behind market paring gains

Sensex, Nifty see profit-booking at higher levels on Friday. 

The benchmark equity indices pared early gains on Friday, slipping from record highs amid weak global cues and profit-booking in select heavyweight stocks.

After touching a fresh 52-week high earlier in the session, the Sensex gave up about 450 points from the day’s peak to trade at 83,683.14. The Nifty also fell below the psychologically crucial 25,650 level.

Wipro, Infosys, ETERNAL, Tata Steel and Hindalco Industries were among the major laggards, declining up to 5 percent.

Key reasons behind market paring gains

1) Weak global cues: Wall Street futures declined up to 1.4 percent, indicating a weak start for U.S. equities. Concerns over regional banks deepened after Zions Bancorporation shares tumbled 13 percent following disclosure of unexpected loan losses in its California unit. Western Alliance also fell nearly 11 percent after the lender filed a fraud suit against one of its borrowers. These developments reignited worries over commercial lending, already fragile since the September failures of U.S. auto parts supplier First Brands and car dealer Tricolor, said Skyler Weinand, chief investment officer at Regan Capital, reported Reuters.

Across Asia, Japan’s Nikkei 225, Shanghai’s SSE Composite and Hong Kong’s Hang Seng Index slipped up to 3 percent, adding to the cautious sentiment.

2) Profit-booking: Back home, investors booked profits at higher levels after the headline indices touched the fresh high, with Adani Enterprises and Tata Motors among the major losers.

3) IT shares decline: IT stocks also came under pressure, dragging the Nifty IT index down 1.5 percent. Wipro fell nearly 5 percent after its September-quarter results failed to impress investors, while Infosys shares declined following its second-quarter earnings announcement.

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