Sensex drops 282 points, Nifty ends below 15,700; auto stocks buck the trend

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Equity benchmarks Sensex and Nifty failed to hold early gains amid profit booking on Wednesday and settled in the red dragged by losses in index heavyweights RIL, HDFC and ICICI Bank. The 30-share BSE index closed at 52,306.08, down 282.63 points or 0.54%. Nifty declined 85.80 points or 0.54% to 15,686.95.

“Consolidation continued as lack of key triggers in the domestic market and flight of foreign funds influenced investors to stay on the side-line. Global markets remain mixed as FED’s reassurance on a slow pace in rates hike failed to get momentum in the market. All the sectors traded in red barring auto as all major manufacturers decided on a price hike. Easing lockdown restrictions and pick up in vaccination drive will aid economic activity, which is likely to be visible in the second half of the financial year,” said Vinod Nair, Head of Research at Geojit Financial Services.

Gainers & losers 

Sectoral watch

Barring Nifty Auto index (up 0.46%) all other sectoral indices ended in the red. Nifty Metal, down 1.13%, was the top sectoral laggard followed by Nifty IT, falling nearly 1%. Nifty Pharma, Nifty Bank slipped around 0.50% each, while Nifty Realty and Nifty FMCG declined 0.36% and 0.31% respectively.

On the other hand, the volatility index surged 4.25% to end at 15.36%.

Broader market

The broader market mirrored the losses in benchmarks. BSE MidCap ended 0.26% lower at 22,434, while BSE SmallCap lost 0.43% to close at 24,952. The overall market breadth was negative as 1,129 stocks on the BSE declined, while 794 advanced and 337 remained unchanged.

Economy

Moody’s Investors Service on Wednesday slashed India’s growth projection to 9.6 per cent for the calendar year 2021, from its earlier estimate of 13.9 per cent, and said faster vaccination progress will be paramount in restricting economic losses to the June quarter.

Global markets

Most European stocks declined while most Asian stocks advanced on Wednesday, 23 June 2021, following overnight gains stateside that saw the tech-heavy Nasdaq Composite rising to a record high.

Minutes from the Bank of Japan’s April monetary policy meeting released Wednesday showed members agreed that stimulus measures, particularly those in advanced economies, could result in a faster than expected pace of recovery for Japan and other countries.

Japan’s factory activity expanded at the slowest pace in four months in June. The au Jibun Bank Flash Japan Manufacturing Purchasing Managers’ Index (PMI) fell to a seasonally adjusted 51.5 in June from a final 53.0 in the previous month, largely due to a sharp decline in output.

US stocks rebounded Tuesday as Federal Reserve Chairman Jerome Powell vowed not to raise rates too quickly as the dollar and oil gave up earlier gains. The S&P 500 ended Tuesday just short of a new closing record, while the tech-heavy Nasdaq Composite climbed to an all-time high.

Federal Reserve Chair Jerome Powell on Tuesday reaffirmed the U.S. central bank’s intent to encourage a “broad and inclusive” recovery of the job market, and not to raise interest rates too quickly based only on the fear of coming inflation.

“We will not raise interest rates pre-emptively because we fear the possible onset of inflation. We will wait for evidence of actual inflation or other imbalances,” Powell said in a hearing before a U.S. House of Representatives panel.