The Indian stock market snapped a four-day gaining streak as Sensex and Nifty closed in the red with muted losses on Tuesday as weak global cues and slightly higher oil prices outweighed a stronger rupee and FII purchases.
Sensex fell more than 104 points to close at 78,181 while Nifty 50 declined around 32 points to end the volatile expiry day session at around 24,399 on Tuesday, wiping off all morning gains. Broader markets also lost steam and closed in the red, with Nifty Smallcap 100 falling 0.66% and Nifty Midcap 100 declining 0.37%.
Trent shares crashed nearly 13% to lead losses on Sensex, as a weaker-than-expected Q1 business update sparked a massive sell-off in the share price of Zudio and Westside's parent. Adani Ports and Bharat Electronics (BEL) shares dropped nearly 2% each, while those of L&T, Reliance Industries (RIL), ICICI Bank, NTPC, Asian Paints, M&M, Tata Steel and Sun Pharma dropped more than 1% each. Bucking the trend, IT stocks, including HCL Tech, Infosys and Tech Mahindra, jumped around 3% each.
Dalal Street’s losses came even as India VIX, which measures market volatility, dropped 0.5% to 11.76. Sectorally, Nifty Metal and Nifty Realty tumbled up to 1.6% to lead losses, while Nifty IT surged more than 2%. The overall market breadth was bearish, with 2,084 declines and 1,191 advances on the NSE, while 109 stocks remained unchanged.
Oil prices rise 1%
Oil prices rose around 1% after reports said that a tanker in the Strait of Hormuz was struck by a projectile. Brent crude futures gained around 1% to trade near $73 per barrel, while WTI Crude futures rose to $69 per barrel.
Despite the gains, oil prices continue to remain in the range of pre-war levels, after soaring to as high as $120 per barrel during the raging conflict between Iran and the US that sparked a massive global energy crisis.
FIIs remain net buyers
Foreign investors remained net buyers of Indian equities for the fourth consecutive session, net purchasing shares worth Rs 243 crore on Monday, according to provisional data available on the NSE.
“The FPI buying is not yet a strong trend, but the fact that they have stopped selling and turned buyers is a significant shift, which is likely to be supported by fundamentals,” said VK Vijayakumar, Chief Investment Strategist at Geojit Investments.
Global stock markets crashed, with South Korea’s Kospi tumbling more than 5%. The rupee gained 0.45% to close at 94.9675 against the US dollar.
What lies ahead?
There are distinct signs of an uptrend in the market, according to Vijayakumar. Two factors which were weighing on Indian markets - the crude price hike and sustained FPI selling- are now behind us and have reversed, he said, noting that crude is back to the pre-war level and FPIs have turned buyers.
“The auto retail sales numbers in June coming at an impressive 22% indicate that the growth momentum in the economy is intact. The sharp decline in crude will keep inflation in check, which, in turn, will enable the RBI to continue with the low interest regime. This means the uptrend in the auto industry and financials, particularly banking, will continue to be supported by the low interest regime and impressive credit growth running above 17%. These two sectors have the potential to lead the next leg of the rally, which is likely to be driven more by large caps. Apart from autos and financials, oil and gas and telecom majors will also support the rally. Retail buying will lift the broader market, too,” he added.
Technical view on Nifty
Yesterday’s close above 24,400 has improved the chances of the much-anticipated 24,800-25,250 move, said Anand James, Chief Market Strategist, Geojit Investments. He, however, cautioned that spikes to 24,600 regions might attract some rejection trades.
“With the prospects of volatility and upside objectives thus outlined, we will go in today with a downside marker placed at 24,360 until 24,600 is seen,” he added.
(With inputs from agencies)
(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of The Economic Times)
