After hitting record high, Sensex closes flat on eleventh-hour sell-off

After starting off on a positive note and the S&P BSE Sensex hitting a record high of 31,522.87 (up 239 points intraday), the market failed to hold on to the gains due to weak global cues and profit-booking.

While the metal and realty indices corrected by more than 1 per cent, stocks of public sector oil companies and information technology came under pressure due to weak crude oil prices and slowdown in FY18 growth prospects estimated by the National Association of Software and Services Companies (Nasscom), respectively.

The Sensex ended flat after earlier rising as much as 0.8 per cent to a record high as IT firms reversed earlier gains after Nasscom issued a muted revenue guidance for exports, while energy firms fell on sliding oil prices.

The benchmark BSE index closed up 7.1 points or 0.02 per cent at 31,290.74, after earlier hitting a record high of 31,522.87. The broader NSE index closed down 3.6 points or 0.04 per cent at 9,630.00.

Hitesh Agrawal, EVP & Head — Retail Research, Religare Securities is optimistic about the markets and advises to buy stocks on declines on expectations of much better corporate earnings growth, continued bold reforms by the government, stronger rupee, sliding crude oil prices and domestic political/policy stability.

Except banking, all other BSE sectoral indices ended in the negative zone. Among them, oil & gas index fell the most by 1.79 per cent, followed by realty 1.73 per cent, metal 1.35 per cent and PSU 1.21 per cent, while banking index was up 0.16 per cent.

Top five Sensex gainers were State Bank of India (+1.5%), HDFC (+1.41%), Reliance (+1.06%), Bajaj Auto (+1.02%) and Asian Paints (+0.71%), while the major losers were ONGC (-2.82%), HUL (-2.62%), Lupin (-2.49%), Power Grid (-2.11%) and Dr Reddy's (-2.05%).

Record high

The benchmark BSE index Sensex surged to a record high as steps taken by the capital markets regulator to attract more investments and tackle massive bad loans of banks boosted sentiment.

Among a host of key decisions, the Securities and Exchange Board of India has relaxed its takeover norms for restructuring listed companies with stressed assets, which is expected to bolster the efforts in fight against bad loans.

RBI minutes

On Wednesday, minutes from the Reserve Bank of India's monetary policy committee revealed a less hawkish tone as it welcomed data showing inflation easing below target, but wanted more assurance the trend would continue before deciding whether to lower interest rates.

“There's a possibility of a rate cut, not now, but in some time. Rate-sensitive stocks, which include banks and auto, will benefit from the rate cut,” said Vinod Nair, head of research at Geojit Financial Services.

Nifty Bank index hits record high

Banking stocks boosted both indexes, with the Nifty Bank index gaining as much as 0.8 per cent to hit a record high.

Shares of YES Bank Ltd and Federal Bank Ltd were up more than 2 per cent, making them the top gainers on the Nifty Bank Index.

IDFC Ltd rose as much as 3.5 per cent, its biggest intraday percentage gain in more than one month, after the RBI allowed foreign investors to resume buying in the company.

Auto stocks also climbed, with the Nifty Auto index up much as 0.9 per cent, its biggest intraday percentage gain in nearly two weeks.

Shares of Maruti Suzuki India Ltd and Tata Motors Ltd rose more than 1 per cent.

Oil and gas companies fell, with GAIL (India) Ltd , the top loser on the Nifty index, down as much 3 per cent, while Oil and Natural Gas Corp Ltd slipped as much as 1.6 per cent

Global markets

European stock markets fell for a third straight day on Thursday, as battered oil prices hovered near seven-month lows hit overnight on worries about a supply glut and falling demand.

Britain's FTSE 100, Germany's DAX and France's CAC 40 all slipped 0.3-0.4 per cent as trading in Europe got under way. US stock futures were also a touch weaker .

Asian stocks advanced on Thursday as oil prices struggled to climb off a 10-month low hit overnight on concerns over a supply glut and falling demand.

MSCI's broadest index of Asia-Pacific shares outside Japan climbed 0.3 per cent.

The S&P 500 and Dow stock indexes were weighed down by falling energy shares as oil prices fell on Wednesday and added to investor concerns about low inflation, while healthcare and technology stocks helped lift the Nasdaq Composite index.

The Dow Jones Industrial Average fell 57.11 points, or 0.27 per cent, to close at 21,410.03, the S&P 500 lost 1.42 points, or 0.06 per cent, dropping to 2,435.61 and the Nasdaq Composite added 45.92 points, or 0.74 per cent, rising to 6,233.95.

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