Profit booking keeps markets off record highs

Mumbai: Reversing early gains, benchmark indices Sensex and Nifty closed lower on Tuesday due to a sell-off in banking and IT shares in the last hour of the session amid a mixed trend in global markets. The 30-share BSE Sensex declined 188.50 points or 0.25 per cent to settle at 74,482.78. The index opened higher and rallied further 440.11 points or 0.58 per cent to hit a high of 75,111.39 in day trade. However, the barometer pared all the gains as selling emerged in banking and IT shares towards the end of the session. The broader Nifty hit a lifetime intraday high of 22,783.35 in day trade before squandering its gains. Nifty closed lower by 38.55 points or 0.17 per cent to finish at 22,604.85 as metal, pharma and IT shares declined.

As many as 25 Nifty shares closed lower, 24 advanced, while one closed unchanged.

“Nifty erased all the intra-day gains in the last hour of trade and ended in the negative zone in a highly volatile session,” said Deepak Jasani, head (retail research), HDFC Securities. “Global markets remained mixed ahead of the US FED policy meet as markets appear to have already factored in the slim chance of a near-term rate cut. Profit booking ensued towards a close given the sharp rally in the last couple of days and a holiday-led truncated week. Domestic initial Q4 corporate earnings forecasts were conservative, however, Nifty50 companies’ earnings to date have remained marginally better, with the exception being the IT sector, while auto and realty continue to be robust,” adds Vinod Nair, head (research), Geojit Financial Services.

“The Bank Nifty witnessed a volatile trading session during the expiry day, with bulls dominating the first half and bears taking control in the second half. Although the index fell short of reaching the 50,000 mark, the overall sentiment remains bullish,” observes Kunal Shah, Senior Technical & Derivative Analyst at LKP Securities.