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Profit-booking erodes early gains on weak global cues

Profit-booking erodes early gains on weak global cues
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Profit-booking erodes early gains on weak global cues

Highlights

Sensex slumps 334 pts, Nifty drops 105 pts

Mumbai: Domestic markets surrendered early gains to finish deep in the red on Wednesday as profit-booking emerged in Reliance Industries, banking and infra stocks amid a weak trend in global equities.

Concerns over frothy valuations and a depreciating rupee also sapped investor confidence, traders said. After a firm opening, the 30-share BSE Sensex suddenly succumbed to selling pressure in mid-afternoon trade. It finally closed 333.93 points or 0.64 per cent lower at 51,941.64, extending its losing streak to the second session.

On similar lines, the broader NSE Nifty slumped 104.75 points or 0.67 per cent to end at 15,635.35. L&T was the top loser among the Sensex companies, shedding 1.80 per cent, followed by Reliance Industries, Bajaj Finserv, IndusInd Bank, Bajaj Finance, SBI, Maruti, Axis Bank and Bajaj Auto. On the other hand, PowerGrid, NTPC, Titan, HCL Tech and Asian Paints were among the gainers, spurting up to 3.42 per cent.

"Domestic equities fell sharply as selling pressure in financials, auto and RIL dragged indices down," said Binod Modi, Head - Strategy at Reliance Securities. Further, Asian markets traded weak, reacting on higher-than-expected jump in China's producer price index at 9 per cent for May, he added.

"Global investors remained cautious ahead of European Central Bank (ECB) policy decision and US inflation data to be released on Thursday. ECB is expected to continue its bond-buying policy to support a recovering economy. "And US inflation is forecasted to be high but transitory. Both these factors, if inline, will provide comfort to the market," said Vinod Nair, Head of Research at Geojit Financial Services. Sector-wise, BSE energy, oil and gas, realty, capital goods, industrials and auto indices fell up to 1.71 per cent, while utilities, power and consumer durables closed higher. Broader BSE midcap and smallcap indices fell up to 0.95 per cent.

Elsewhere in Asia, bourses in Seoul, Tokyo and Hong Kong closed in the red, while Shanghai ended with gains. Equities in Europe were also trading on a negative note in mid-session deals. International oil benchmark Brent crude was trading 0.36 per cent higher at 72.48 per barrel. The rupee declined by 8 paise to end at 72.97 against the US currency on Wednesday in its second straight day of losses.

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