Sensex down 38 points at closing, Nifty ends below 16,300

The benchmark indices gave up all their gains to close in the red on Monday.

The market started the week on a positive note, tracking favourable global cues. However, the indices gave up their early gains, witnessing selling pressure across multiple counters during closing hours, as inflation concerns and consequent monetary tightening continued to impact investor sentiment.

The BSE Sensex closed at 54,288.61, down 37.78 points or 0.07 per cent. It recorded an intraday high of 54,931.30 and a low of 54,191.55. The Nifty 50 closed at 16,214.70, down 51.45 points or 0.32 per cent. It recorded an intraday high of 16,414.70 and a low of 16,185.75.

Breadth favours decliners

The market breadth was in favour of the decliners, with 1,989 stocks declining on the BSE as against 1,421 that advanced, while 167 remained unchanged. Further, 10 stocks hit the upper circuit as compared to the 10 that were locked in the lower circuit. Besides, 93 stocks touched a 52-week high, and 62 touched a 52-week low.

Investors remained concerned after the Reserve Bank of India (RBI) Governor Shaktikanta Das on Monday said expectations for a rate hike are a no-brainer as inflation is a major area of concern, even amidst a steady economic recovery that is gaining traction.

“RBI would like to raise the rates in the next few meetings. In the next meeting at least,“ Das said in an interview to CNBC-TV18.

Vinod Nair, Head of Research at Geojit Financial Services said, “The government and RBI are making persistent efforts to moderate future inflation. Government fiscal measures such as a customs duty hike on steel and similar steps on other products will help control inflation. However, the hawkish monetary and fiscal measures adopted by the RBI and the government will have a cascading effect on the market and the economy in the short to medium-term.”

Mahindra & Mahindra, Maruti, Hindustan Unilever, L&T and Wipro were the top gainers on the Nifty 50, while JSW Steel, Tata Steel, Divi’s Lab, ONGC and Hindalco were the top losers. 

Metals lose shine

Metals came under pressure after the Government on Saturday imposed export duties on steel products. However, the Centre also waived customs duty on the import of some raw materials, including coking coal and ferronickel, used by the steel industry, a move which will lower costs for the domestic industry and reduce prices.

Nifty Metal closed over 8 per cent lower.

Shrikant Chouhan, Head of Equity Research (Retail), Kotak Securities Ltd said, “After a firm start, the markets failed to hold on to their early upsurge and simply lost track to end marginally lower. Metal stocks bore the brunt, while realty, and oil & gas stocks also came under selling pressure, thus dragging key indices lower.”

Auto, IT, consumer durables gain

On the sectoral front, a majority of indices closed in the red. While auto, IT and consumer durables gained, metals, oil & gas, pharma and realty faced increased pressure. 

Nifty Auto closed nearly 2 per cent higher, while Nifty IT was up over 1 per cent. Nifty Consumer Durables was up 0.84 per cent.

Meanwhile, Nifty Oil & Gas closed nearly 2 per cent lower. Nifty Realty, Nifty Pharma and the Nifty Healthcare Index each were down over 1 per cent at closing.

Broader indices 

The broader market also faced pressure with smallcaps witnessing increased selling.

Nifty Midcap 50 was down 0.30 per cent at closing, while Nifty Smallcap 50 was down 1.06 per cent. The S&P BSE Midcap was down 0.26 per cent, while the S&P BSE Smallcap was down 0.64 per cent.

The volatility index rose 1.28 per cent to 23.40.

COMMENT NOW