Moneycontrol Bureau
Equity benchmarks snapped two-day winning streak Thursday with the Nifty closing below 8000 level on consistent weakness in rupee and expiry of November derivative contracts. Continued disruption in Rajya Sabha by opposition parties over currency demonetisation also dented the market sentiment.
The 30-share BSE Sensex was down 191.64 points at 25860.17 and the 50-share NSE Nifty slipped 67.80 points to 7965.50 while the broader markets outperformed benchmarks on positive market breadth for the second consecutive session. The BSE Midcap and Smallcap indices declined only 0.1 percent as about 1350 shares advanced against 1205 declining shares on the exchange.
The tepid interest in rolling over to December series suggested that traders are a bit circumspect, especially with RBI and FOMC rate decisions scheduled in the early part of December, Anand James of Geojit BNP Paribas Financial Services said. However, the premium given to Nifty December futures suggested that bulls have not given up yet, he added.
According to Vinod Nair of Geojit BNP, this phase of consolidation is likely to continue in the near-term given the domestic setbacks and losing strength of the emerging markets due to buoyant bond yield.
Ajay Srivastava of Dimensions Consulting believes the Indian markets have already entered the bear market and the economy is likely to contract for the next few quarters.
FIIs have consistently been offloading their exposure as they net sold nearly Rs 18,000 crore worth of shares since October (till November 23).
In November series, the Sensex shed 7.4 percent and the Nifty lost 7.6 percent, the biggest loss in a series since August 2013. Nifty PSU Bank and Metal were the only gainers among sectoral indices, up 1.6 percent and 3.5 percent, respectively.
Meanwhile, the rupee recovered after hitting record low of 68.86 against the US dollar. RBI's intervention may have supported the recovery. It closed at 68.73 a dollar (the lowest closing level since August 28, 2013) down 17 paise from the previous settlement.
In today's trade, private banks, oil, FMCG, select auto and pharma stocks were under pressure whereas technology and PSU banks bucked the trend.
Tata Motors was the biggest loser among Sensex 30 stocks, down 3.9 percent followed by HDFC Bank, ICICI Bank, Reliance Industries, Axis Bank and M&M with 1.5-2.5 percent loss.
Sun Pharma lost 2.5 percent after CNBC-TV18 reports indicated that the US Food & Drug Administration has issued 7 observations after inspecting Mohali plant that has been under import alert since 2013. However, analysts are not worried about these observations.
Cipla gained 0.3 percent. Nomura has retained its buy rating with a target price of Rs 605 on the stock after the company's US subsidiary sold entire 16.7 percent stake in Chase Pharma to Allergan Plc.
The Nifty IT index climbed 1.1 percent after the rupee hit record low. Infosys, TCS and Tech Mahindra gained more than 1 percent.
PSU Bank index also rose over 1 percent as Bank of India, Bank of Baroda, SBI and Union Bank gained 1-3 percent.
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