The S&P BSE Sensex fell over 300 pts, to trade at 85,323, retreating from Monday’s milestone of 86,159.02. The NSE Nifty 50 also eased, slipping 80 points, to drop below 26,100. Both benchmarks had climbed to fresh 14-month highs on Monday, up roughly 0.5% each, but momentum faded late in the session as profit-taking set in, leaving markets on a softer footing at Tuesday’s open.
Shares of HDFC Bank, ICICI Bank, Ultratech Cement, Axis Bank and Tata Steel were among the biggest drags on the 30-stock Sensex, slipping between 0.3% and 1% in early trade.
The broader market showed a split trend, with the midcap index edging up 0.2%, while the small-cap gauge slipped 0.3%.
Bajaj Housing Finance slumped 9% to a 52-week low after a block trade in which promoter Bajaj Finance is believed to have sold a 2.35% stake valued at Rs 1,890 crore.
Meanwhile, Bharat Dynamics Ltd gained 2% after the company said it received additional orders worth Rs 2,461.62 crore from the Indian Army.
Expert views
It appears that the market is consolidating around the new record highs before breaking out to new highs, said Dr. VK Vijayakumar, Chief Investment Strategist at Geojit Investments, adding that “There is fundamental support for newer highs as reflected in the robust GDP numbers and the leading indicators like auto sales in November. The continuing weakness in the rupee is a dampener which is impacting FII flows. A fair trade deal between India and the US can stem the weakness in rupee, but this has been hanging fire for too long.”
Investors can use the current period of consolidation to slowly accumulate fairly-valued largecaps and growth-oriented midcaps which will lead the next leg of rally in the market, said Vijayakumar, adding that the smallcap segment continues to be over-valued.
“The Bank Nifty, despite the recent run up, have the potential to impart resilience to the market since there is valuation comfort in this segment. The pick up in credit growth is another positive for the segment,” said Vijayakumar.
FII/DII Tracker
On the institutional front, Foreign Institutional Investors (FIIs) sold equities worth a little over Rs 1,171 crore on December 1, while Domestic Institutional Investors (DIIs) were net buyers to the tune of Rs 2,559 crore.
Global Markets
Stocks posted modest gains Tuesday as investors treaded carefully following a sharp pullback in cryptocurrencies and a global bond selloff sparked by expectations of an interest-rate increase in Japan.
S&P 500 futures were little changed in early Asian trading after U.S. equities fell overnight. Japanese government bonds stayed under pressure ahead of a 10-year auction, extending a weeks-long slide tied to concerns over the country’s fiscal outlook.
MSCI’s Asia-Pacific ex-Japan index rose 0.6%, while Tokyo’s Nikkei added 0.5%, clawing back some ground after Monday’s steep decline.
Gold held above $4,200 an ounce, maintaining recent gains.
Crude impact
Oil prices edged higher for a second straight session on Tuesday as traders weighed the fallout from Ukrainian drone attacks on Russian energy facilities and rising tensions between the U.S. and Venezuela.
Brent crude added 14 cents, or 0.2%, to $63.31 a barrel, while U.S. West Texas Intermediate rose 18 cents, or 0.3%, to $59.50 in early Asian trading.
Rupee vs Dollar
The Indian rupee slid to a fresh record low on Tuesday, weighed down by speculative flows and corporate dollar demand. The currency weakened to 89.76 per U.S. dollar, slipping past Monday’s all-time low of 89.7575, and was down roughly 0.24% on the day.
The U.S. dollar index, which tracks the greenback against six major peers, edged slightly lower to 99.408 in early Asian trading.
(with inputs from agencies)
