Sensex, Nifty erase early gains after fresh highs, dragged by IT

Benchmark indices erased all early gains to trade in the red during the afternoon on Monday, after Sensex and Nifty recorded fresh highs.

Market rallied ahead during the early trade amid mixed global cues with indices recording fresh highs, tracking gains in heavyweights such as Reliance and HDFC.

Indices soon turned negative, dragged by IT and financials. Investors soon turned cautious amid uncertainty around the Covid-19 situation and harsher restrictions in States like Maharashtra owing to the ‘Delta Plus’ variant of Covid-19. Worries over rising crude prices and weakening rupee impacted investor sentiments.

Also read: Sensex jumps over 150 points to fresh high; Nifty crosses 15,900

At 1 pm, Sensex which recorded a fresh all-time high of 53,126.73, was ruling at 52,807.34, down 117.7 points or 0.22 per cent. It recorded an intraday low of 52,728.70.

Nifty 50 which surpassed the 15,900 levels to record a fresh high of 15,915.65 was trading at 15,834.15, down 26.20 points or 0.17 per cent. It recorded an intraday low of 15,812.50.

Divi’s Labs, Dr Reddy, ONGC, Hindalco and Adani Ports were the top gainers on the Nifty 50 while HDFC Life, TCS, Titan, Shree Cements and HCL Tech were the top laggards.

Dr V K Vijayakumar, Chief Investment Strategist at Geojit Financial Services urged investors to remain cautious as FIIs are likely to turn sellers above 15900 levels.

“News on the Covid front continues to be mixed and a bit perplexing. While the fresh cases have declined in India, the Delta variant continues to be a cause of concern. Due to its higher transmissibility, fresh restrictions are being imposed even in developed countries like UK & Australia,” said Vijayakumar.

Also read: Rupee falls 6 paise to 74.26 against US dollar in early trade

“Crude above $76 is another major macro worry. The implication of rising crude and rising fuel prices is that it will spill over into rising inflation, ultimately forcing MPC to turn a bit hawkish in its monetary stance. When this happens it would turn out to be negative for growth and the stock market,” Vijayakumar added.

Metals, Pharma, PSU Bank rally

On the sectoral front, metals, pharma and PSU Bank stocks rallied as IT dragged. Nifty Metal was up 1.54 per cent while Nifty Pharma was up 1.43 per cent. Nifty PSU Bank recorded the highest gains and was trading 2.05 per cent higher. Meanwhile, Nifty IT was down 0.59 per cent. Nifty Bank was down 0.02 per cent while Nifty Financial Services was down 0.21 per cent.

Broader indices

As for broader indices, Nifty Midcap 50 was up 0.59 per cent while Nifty Smallcap 50 was up 0.62 per cent. The S&P BSE Midcap was up 0.50 per cent while the S&P BSE Smallcap was up 0.52 per cent. Notably, the volatility index fell 0.35 per cent to 13.32.

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