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Informist, Tuesday, May 20, 2025

By Akash Mandal

MUMBAI – The benchmark indices ended sharply lower Tuesday, extending their decline for the third straight session, as investors took some more profits after last week's sharp 4% rise. After opening higher, the indices moved in a tight range until they began facing increased selling pressure in the latter part of the session. Investors now await fresh triggers to ascertain the market's direction, analysts said.

Foreign investors have also seemed uncertain about Indian equities in recent days owing to positive triggers for markets such as China, analysts said. The positive sentiment around Chinese equities after the positive trade developments between the US and China were boosted after China cut its benchmark lending rates for the first time since October to bolster economic growth. Foreign investors have net sold Indian equities in three of the past seven sessions after heavily buying Indian shares for 16 straight sessions prior to that.

The India VIX, the fear gauge of Dalal Street, was choppy throughout the day amid this uncertainty. The index fell 8% and rose 2% to its intraday low and high, respectively, before settling slightly higher at 17.3850. The Nifty 50 fell 261.55 points, or 1.1%, to close at 24683.90 points, dragged down by heavyweights such as HDFC Bank, ICICI Bank, and Larsen & Toubro. Despite the fall, it is still 675 points above the closing price May 9, before the start of last week's rally.

All sectoral indices ended in the red. Automobile, healthcare and pharmaceuticals, banks, financial services, and defence stocks were at the forefront of the sell-off. The Nifty Auto, Nifty India Defence, Nifty Financial Services, and Nifty Bank indices each ended 1-2% lower. Defence stocks ended lower, possibly on profit sales, analysts said. The Nifty India Defence has fallen 3% in the past two sessions after rising nearly 21% in the six sessions prior to that. Cochin Shipyard, Data Patterns (India), and Garden Reach Shipbuilders & Engineers all ended 3-8% lower. Hindustan Aeronautics ended over 3% lower after UBS downgraded the stock to 'neutral' from 'buy'.

Shares of Eternal fell 4% and were the worst hit in the Nifty 50. The operator of Blinkit and Zomato could face significant selling pressure once the company starts the process of converting into an Indian-owned and -controlled company, a proposal that has garnered support from a majority of its shareholders, The Economic Times reported, citing Jefferies. The proposal looks to impose a cap on foreign ownership, and the stock could see outflows of $1.3 billion if it is passed, the report said.

Many stocks also reacted to their March quarter earnings. DOMS Industries ended 9% lower and was the worst hit in the Nifty 500 after its bottom line for the March quarter missed the Street's view. HEG closed over 6% lower after the company reported a loss for the quarter against a net profit a year ago. Its top line fell 2% on year and expenses surged nearly 16%, mainly due to a rise in other expenses. ACME Solar Holdings ended nearly 4% lower after it slipped into the red in the March quarter, reporting a net loss of INR 106.13 million against a net profit of INR 4.04 billion a year ago.

Shares of Pfizer rose 15% after its net profit for the March quarter rose nearly threefold on year, boosted by an exceptional gain of INR 1.73 billion on account of a net gain from the transfer and sale of assets. The stock ended nearly 11% higher. Redington surged 10% and hit a fresh lifetime high of INR 306.99 after its net profit for the quarter almost doubled on year, boosted by a one-time gain on divestment by its step-down subsidiary in Turkey. The stock ended 1% higher.

NLC India ended nearly 2% higher after its bottom line for the March quarter nearly quadrupled on year because of an income of INR 8.21 billion in its net movement in regulatory deferral account balances. DLF rose 2% after its consolidated net profit for the quarter beat the Street's expectations by a wide margin. 

* Of the Nifty 50 stocks, 7 rose and 43 fell

* Of the Sensex stocks, 2 rose and 28 fell

* On the NSE, 915 stocks rose, 1,974 fell, and 80 were unchanged

* On the BSE, 1,435 stocks rose, 2,534 fell, and 135 were unchanged

* Nifty India Defence: down 2.4%; Nifty Auto: down 2.2%; Nifty IT: down 0.5%

BSE                                               NSE

Sensex: 81186.44, down 872.98 points or 1.1%      Nifty 50: 24683.90, down 261.55 points or 1.1%

End

Edited by Rajeev Pai

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