Mid-day Mood | Sensex, Nifty snap two-day winning streak on weak global cues

After the stellar gains in recent months, the benchmarks are likely to witness consolidation in the coming days.

The Indian market fell prey to profit booking on January 8, mirroring the subdued trend in Asian markets following a spike in US 10-year bond yields after strong labour data sparked concerns of a delay in the Federal Reserve's move to cut rates.

A slew of economies including the US, South Korea and Japan will release inflation data through the week, which also triggered caution among investors.

Around noon, the Sensex was down 346.96 points, or 0.48 percent, at 71,679.19, and the Nifty was down 106.50 points, or 0.49 percent, at 21,604.30. About 1,654 shares rose, 1,749 fell, and 72 were trading unchanged.

The FMCG sector was under pressure as a slew of companies reported weak quarterly sales numbers in their business updates, hinting at prolonged rural weakness. The Nifty FMCG index was the worst hit among sectoral indices, down 1.5 percent.

Sectors like banks, energy, metals, pharma, IT, and PSU banks also edged lower, while automobile and infra remained flat.

The broader market was weak, with small and midcap stocks trading lower.

"The year-end rally which took the Nifty up by around 14 percent from the 2023 October lows, is slowly running out of steam. The major challenge for the rally comes from the 'mother market' US, which is showing signs of weakness," said VK Vijayakumar, Chief Investment Strategist, Geojit Financial Services.

The worry in the US is that much-awaited rate cut in March may not materialise since the labour market continues to be tight and the unemployment data is lower than expected, Vijayakumar said.

"Inflation coming under control means that the rate hiking cycle is over and the Fed pivot is imminent. But the market will be disappointed if the rate cut doesn’t happen in March. The sign of this possible trend can be seen in the firming up of the 10-year US bond yield (at) above 4 percent," he added.

The week has begun with modest upside modest expectations to 21,860-21,930 but with eyes on 22,400. While a collapse was unlikely but a slip below 21,630 could lead to consolidation and below 21,370, the next support, the fall would be steep, Anand James, Chief Market Strategist, Geojit Financial Services, said.

Adani Ports and SEZ, ONGC, HCLTech, Bajaj Finance and Bharti Airtel

UPL, Tata Consumer Products, Divi's Labs, HUL and Apollo Hospital

HCLTech, Bajaj Finance and Bharti Airtel

HUL, Tech Mahindra  and Mahindra & Mahindra

Godrej Consumer Products: The share slumped 5 percent as the FMCG major said the company would see a low-single-digit sales decline in rupee terms at a consolidated level for Q3.

Sula Vineyards: The wine maker soared over 15 percent and hit a 52-week high after CLSA rolled out a "buy" rating. The global brokerage firm has raised the target price of the winery to Rs 863 from Rs 571 apiece, implying an upside of 42 percent from current levels.

Adani Wilmar: The stock fell over 2 percent after the company said its year-on-year standalone sales declined 15 percent in Q3.

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