Profit Booking Pulls Down Markets

Investor mindset turned gloomy with the tepid earnings and a knee jerk reaction from FIIs, which dragged the market sentiment. However, mid and small-caps are experiencing bargain hunting following the recent decline, though the sustainability of this momentum-driven buying remains uncertain, said Vinod Nair, head (research), Geojit Financial Services

Mumbai: Extending its losing streak to third day, benchmark Sensex declined by 138 points on Wednesday in a choppy trade as investors booked profits in auto, pharma and capital goods shares amid continued FPI outflows. The 30-share BSE Sensex erased its earlier gains and closed lower by 138.74 points or 0.17 per cent at 80,081.98 with 22 of its constituents ending lower. The index opened lower but later traded with gains on bouts of buying by investors. However, increased selling in the second half dragged the index below the 80,000 mark to 79,891.68. The NSE Nifty closed lower by 36.60 points or 0.15 per cent to 24,435.50. It moved between a high of 24,604.25 and a low of 24,378.10 in day trade.

“Investor mindset turned gloomy with the tepid earnings and a knee jerk reaction from FIIs, which dragged the market sentiment. However, mid and smallcaps are experiencing bargain hunting following the recent decline, though the sustainability of this momentum-driven buying remains uncertain. The US 10-year yield inched higher, signalling a slower tempo of rate cuts by the FED, which is poised for a risk-off sentiment towards EMs,” said Vinod Nair, head (research), Geojit Financial Services.

The BSE smallcap gauge jumped 0.93 per cent and midcap index climbed 0.48 per cent.

“Apart from the concern of continuous outflow of the foreign investors, the disappointment on the earnings front is largely weighing on the sentiment,” Ajit Mishra, Sr V-P (research), Religare Broking Ltd.

Among sectoral indices, BSE power fell by 1.39 per cent, capital goods (1.17 per cent), industrials (0.75 per cent), auto (0.71 per cent) and utilities (0.57 per cent). IT jumped 1.98 per cent, teck (1.25 per cent), telecommunication (0.41 per cent) and financial services (0.40 per cent).

“Nifty opened gap down and witnessed a volatile day of trade today. It swung in both directions and ultimately closed in the negative. Considering the price and momentum indicator we expect the rangebound price action to continue,” adds Jatin Gedia, technical research analyst at Sharekhan by BNP Paribas.

From the 30 Sensex pack, Mahindra & Mahindra, Sun Pharma, Power Grid, NTPC, Adani Ports, Larsen & Toubro, ICICI Bank and Titan were among the biggest laggards. Bajaj Finance climbed nearly 5 per cent after the firm reported a 13 per cent increase in consolidated net profit at Rs 4,014 crore in the second quarter ended September 2024. Tech Mahindra, Tata Consultancy Services, HDFC Bank, HCL Technologies and Bajaj Finserv were among other big gainers.