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Market ended its 7-day rally on Tuesday with benchmark indices ending flat amid profit-booking.
While key indices were dragged by metals, stocks from energy, infrastructure and IT witnessed buying action. Market erased early gains to trade flat through the day despite positive global cues.
The BSE Sensex closed flat at 51,934.88, down 2.56 points. It hit an intraday high of 52,228.65 and a low of 51,808.88. The Nifty 50 lost momentum after closing at record highs for three consecutive sessions to end at 15,574.85, down 7.95 points or 0.05 per cent. It hit a new all-time high of 15,660.75 in the first half amid a volatile trading session. It hit an intraday low of 15,528.30.
Breadth turns negative
The breadth of the market turned negative with 1,812 stocks declining, 1,323 advancing and 135 remaining unchanged on the BSE. As many as 388 securities hit the upper circuit and 246 the lower circuit; 294 hit their 52-week high while 29 touched a 52-week low.
Binod Modi, Head Strategy at Reliance Securities said, “Benchmark Nifty traded flat today despite positive global cues. Barring pharma, most key sectoral indices traded in red today with marginal correction. Further, Reliance Industries remained in focus today and arrested any sharp fall in the Index.”
Adani Ports, ONGC, Bajaj Finance, State Bank of India and HDFC were the top gainers on the Nifty 50 while JSW Steel, Tata Steel, ICICI Bank, Asian Paints and Ultratech Cement were the top laggards.
Economic data hurts sentiments
Weak economic data also impacted investor sentiment today.
Vinod Nair, Head of Research at Geojit Financial Services, said, "Despite positive global cues and optimism from declining fresh covid cases, domestic bourses erased its early gains and traded flat owing to weak economic data. Upcoming RBI policy and likely delay in the start of monsoon season bought cautiousness to the momentum."
S Ranganathan, Head of Research at LKP securities, said, "Indices traded in a range and closed flat even as Corporate India has been announcing capital expenditure plans since the start of the fiscal. Weak PMI data released today did not help sentiments as we saw profit-taking across the Metal space today. “
Weak manufacturing PMI data for May further impacted investor sentiments.
Purchasing Managers’ Index for the manufacturing sector slipped to 50.8 in May from 55.5 in April, economic research agency HIS Markit reported on Tuesday.
Separately, global rating firm Moody’s on Tuesday said it expects economic disruptions to be limited during the April-June quarter on account of the second wave of the pandemic. It pegged India’s GDP growth at 9.3 per cent in FY22.
Apart from this, the State Bank of India’s economic research department has also revised its real GDP projection for FY22 to 7.9 per cent from 10.4 per cent earlier owing to the impact of the second wave of the pandemic on the economy.
Metals witness profit-booking
On the sectoral front, indices except Nifty IT, Nifty Media and Nifty Pharma were in the red. Metal and financials remained under pressure through the day. Realty stocks also faced pressure.
Nifty Metal was down 0.78 per cent and Nifty Bank slipped 0.53 per cent. Nifty Private Bank and Nifty PSU Bank edged down 0.93 per cent and 0.57 per cent respectively. Nifty Realty was down 0.52 per cent.
Auto stocks also dragged as companies announced sales figures for May. Nifty Auto was down 0.32 per cent.
Nifty IT managed to retain gains in the second half and closed 0.11 per cent higher.
Profit booking drags broader indices
Midcap and smallcap stocks witnessed profit booking with all broader indices closing in the red. Nifty Midcap 50 was down 0.58 per cent while Nifty Smallcap 50 was down 0.26 per cent. The S&P BSE Midcap was up 0.01 per cent while the S&P BSE Smallcap was down 0.31 per cent.
The volatility index rose 2.97 per cent to 17.39.
"Notably, profit booking was visible in midcap and small-cap stocks today after witnessing a sharp rally in the last couple of days. Volatility index hardened today after continuous fall in the last three days," said Modi.
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