Sensex snaps three-day winning streak, ends 49 points down

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Indian markets turned volatile and slipped into the negative terrain after rising to new record highs.  The Sensex scaled a record high of 52,516 & Nifty hit a record high of 15,431 level in early trade.

At close, the Sensex was down 49 points or 0.10% at 52,104, and the Nifty was down 1 point at 15,313.

Power Grid, closing over 6% higher, was the top Sensex gainer followed by ONGC, NTPC and Kotak Bank. Axis Bank, ICICI Bank, Nestle India and Infosys were among the laggards.

On the sectoral front, Nifty Metal index was leading with about 3% gains, and Nifty PSU Bank rose 1.64% in day’s trade.  Whereas Nifty IT index fell around 1.5% & Nifty Bank, Nifty FMCG fell over 0.50%.

The broader market bucked the trend. The BSE Mid-Cap index was up 0.19% & BSE Small-Cap index rose 0.43%.

Sellers outnumbered buyers. On the BSE, 1,348 shares rose, and 1,628 shares fell. A total of 168 shares were unchanged.

Domestic equities witnessed some amount of pullback after a brisk opening, said Binod Modi, Head – Strategy at Reliance Securities.

“PSU Banks and Metals remained in focus. However, selling pressure in Financials, IT and FMCG dragged index. Volatility index also surged almost 2 per cent. Notably, midcap and smallcap stocks remained in focus as improved earnings visibility has started attracting investors in this space,” he added.

Economy

India’s exports grew by 6.16% to $27.45 billion in January 2021, according to data by the commerce ministry. Imports grew by 2% to about $42 billion, leaving a trade deficit of $14.54 billion during the month under review, the data showed.

Meanwhile, Credit Suisse has reportedly upgraded its stance on India to ‘overweight’ is its Asia pacific (APAC) model portfolio. India, it believes, looks much better positioned cyclically and relative to the pandemic. Within Asia Pacific (ex-Japan), the brokerage is now biased towards second phase COVID recovery markets—Korea, India, Australia, Singapore, and Hong Kong— and away from the early recovery markets (China and Taiwan) and the late-recovery markets in Asean. As with India, earnings momentum is strong, and the credit cycle early. The currency is one of the regions’ cheapest on a real effective exchange rate (REER) basis, the brokerage reportedly said.

Global markets

Most European stocks were trading higher while Asian stocks advanced across the board on Tuesday as optimism about the global economic recovery and expectations of low-interest rates drive investments into riskier assets.

The World Health Organization on Monday authorized the AstraZeneca/University of Oxford COVID-19 vaccine for emergency use, expanding access to the comparatively inexpensive shot around the world.

The mainland Chinese markets were closed for Lunar New Year through Wednesday. The U.S. stock market was closed on Monday for Presidents Day.

(With inputs from PTI)