The Indian market wilted under selling pressure in a volatile day of trade to end lower on July 24, with earnings season and weak global cues dragging the equity benchmarks lower.
The 30-pack Sensex ended at 66,384.78, down 299.48 points or 0.45 percent. The broad-based Nifty50 closed at 19,672.35, down 0.37 percent or 72.65 points.
FMCG names were beaten down led by ITC, which announced the demerger of its hotels business. Selling was also seen in metals and oil & gas. Pharma and healthcare indices defied the trend and saw some buying.
“As expectations are getting reset in sync with the first quarter earnings that are underway, we witnessed profit-booking post earnings and news flows today in heavy weights as well as financials,” said S Ranganathan, Head of Research at LKP Securities.
Investors need to be mindful of cuts in stock prices if earnings fail to match with expectations. The PSE Index, however, exhibited keen interest from participants, as several of its constituents rose on the back of likely inclusion in the MSCI as well as new clean-energy orders, he said.
Sectors and stocks
Among the Nifty 50 stocks, IndusInd Bank was the biggest gainer, which rose 2 percent. SBI Life Insurance, SBI Life and Dr Reddy's Labs were other gainers. ITC was the top gainer, down over 4 percent. Kotak Bank, Tech Mahindra and Reliance Industries were other top losers of the day.
The biggest sectoral loser was Nifty FMCG, which fell about 2 percent. Nifty Metal and Nifty Oil & Gas declined 0.7 percent each, Nifty Healthcare and Nifty Pharma added about 0.4 percent each and were among the biggest gainers.
In the broader market, the trend was mixed with smallcaps having an edge. Nifty Midcap 100 slid 0.15 percent while Nifty Smallcap 100 added 0.37 percent. Nifty 500 was down 0.23 percent.
OUTLOOK for July 25
Shrikant Chouhan, Head of Research (Retail), Kotak Securities Ltd
There is no pessimism as such in the markets but the normal correction which was pending for sometime, and with results from Infosys and Hindustan Unilever not coming on expected lines, investors are taking the opportunity to reduce their positions ahead of the key US FOMC policy outcome to be announced this Wednesday.
Technically, after a muted opening the Nifty is consistently facing selling pressure at higher levels. On intraday charts, the index held the lower top formation and on daily charts, it has formed a small bearish candle, which is largely negative. We are of the views that the index has completed a one leg of technical correction but a fresh uptrend rally is possible only after the dismissal of 19750. Below the same, the market could slip till 19600-19575. On the other side, above 19750 the index could rally till 19800-19835.
Vinod Nair, Head of Research at Geojit Financial Services
Volatility has re-emerged as initial Q1 results are below the expectations. Sector wise setbacks were experienced in IT and FMCG, unveiling weak demand and high input costs. Banks are mixed while Pharma stocks are withholding the volatility in anticipation of a better demand from developed economies, reduction in US pricing issues and expansion in operating margins. Investors are also watchful of the upcoming FOMC meeting, addressing rate hike and quantitative tightening measures, which could have an implication on FIIs inflows.
Ajit Mishra, SVP - Technical Research, Religare Broking Ltd
It is a healthy correction as it would help in easing the overbought condition and we expect Nifty to respect the 19300-19500 zone during this phase. Traders should focus on managing their existing trades and accumulating quality stocks on dips. We feel the performance of the banking pack would play a critical role ahead.
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