More Stories

Informist, Monday, Sept. 30, 2024

By Noel John

MUMBAI – Headline equity indices closed sharply lower today as investors booked profits following the recent bull run. Indices hit fresh record highs every day in the previous week as sentiment was boosted by a deeper interest rate cut by the US Federal Reserve, a good monsoon, a significant year-on-year rise in crop sowing, and as China announced a slew of measures to boost its economy, analysts said.

The Nifty 50 ended 1.4% lower at 25810.85 points Monday and the Sensex ended 1.5% lower at 84299.78 points. Market sentiment was also dampened by the growing tensions in West Asia and a stronger yen, said Vipin Kumar, senior technical and derivatives analyst at Globe Capital Market. The Nifty 50 will likely fall to 25400 points if it remains below 25800 points, according to Kumar. 

Ajit Mishra, senior vice president of research at Religare Broking, sees the fall in indices as a normal correction tracking weak global cues. Mishra expects the Nifty 50 to hold its support at 25550–25600 points. However, the market is trading at expensive valuations and should correct more before providing fresh buying opportunities, said Saral Seth, vice president of institutional equities at IndSec Securities. 

Investors sold shares of financial services, oil and gas, and automobile companies to book some of their profits Monday, while those of metal companies extended gains from last week. Profit bookings in index-heavyweight stocks, such as Reliance Industries, ICICI Bank, and HDFC Bank, dragged down the 50-stock index sharply. 

Shares of Reliance Industries ended 3.3% lower at INR 2,953.15 on the National Stock Exchange, snapping a three-day winning streak. Investors are taking out their profits, which could keep the stock range-bound in the short term, said Ruchit Jain, lead research analyst at 5paisa. The stock has also snapped a three-week winning run after rising 4.2% during the period. 

Shares of Trent and Bharat Electronics fell sharply, tracking the broad-based market correction, after their debut on the Nifty 50 Monday. Trent's financial performance is expected to be better in the second half of the financial year owing to festival season sales, Preeyam Tolia, equity research analyst at Axis Securities. Further, the robust growth in its value fashion segment, Zudio, and focus on its grocery retail business, Star Bazaar, would be a key driver for the company's strong performance going forward, Tolia said. 

Shares of Hero MotoCorp ended over 4% lower to become the worst hit in Nifty 50, extending losses from last week. As per Jathin Kaithavalappil, assistant vice-president of research at Choice Equity Broking, the upcoming sales data for September will show nominal growth for two-wheelers. Sentiment around the stock was also dampened after Goldman Sachs, in a report Monday, said Hero MotoCorp lost 370-basis-point market share on a year-on-year basis, as per media reports. The brokerage further said that the company slipped to second position in the domestic two-wheeler segment. 

Despite the sharp sell-off in the markets, shares of metal companies extended gains, supported by fresh stimulus from China. Shares of JSW Steel, Hindalco Industries, Tata Steel, and NMDC were among the top gainers in the market. These stocks rose sharply after the People's Bank of China Sunday asked commercial banks to lower mortgage rates for existing home loans before Oct. 31. The banks are estimated to reduce the existing mortgage rates by about 50 basis points. 

The rate cut announcement is in addition to several other stimulus measures announced by the Chinese central bank last week. The apex bank Friday cut its seven-day reverse repurchase rate and lowered the reserve requirement ratio for banks. Earlier last week, the government of China also lowered the minimum down payment ratio on second home purchases to 15% from 25% earlier. All of these measures are positive for the global metal sector as China remains the major consumer and producer of all the major metals, said Seth of IndSec Securities.

* Of the Nifty 50 stocks, 12 rose and 38 fell

* Of the Sensex stocks, 5 rose and 25 fell

* On the NSE, 1,137 stocks rose, 1,674 fell, and 81 were unchanged

* On the BSE, 1,819 stocks rose, 2,223 fell, and 151 were unchanged

* Nifty Auto: down 2.1%; Nifty Financial Services: down 1.7%; Nifty Metal: up 1.3%

BSE                                               NSE
Sensex: 84299.78, down 1272.07 points or 1.49%    Nifty 50 25810.85, down 368.10 points or 1.41%

End

Edited by Vidhi Verma

For users of real-time market data terminals, Informist news is available exclusively on the NSE Cogencis WorkStation.

Cogencis news is now Informist news. This follows the acquisition of Cogencis Information Services Ltd by NSE Data & Analytics Ltd, a 100% subsidiary of the National Stock Exchange of India Ltd. As a part of the transaction, the news department of Cogencis has been sold to Informist Media Pvt Ltd.

Informist Media Tel +91 (22) 6985-4000

Send comments to feedback@informistmedia.com

© Informist Media Pvt. Ltd. 2024. All rights reserved.