Equity benchmarks failed to hold on to intra-day gains on Monday as cautious investors trimmed exposure to banking and finance counters despite firm global cues. Positive commentary from HCL Tech lifted IT stocks, but it was not enough to offset the weakness in index majors HDFC twins, Reliance Industries and ICICI Bank. The BSE Sensex opened strong and was on course to register its third straight session of gains, but suddenly came under heavy selling pressure in late-afternoon trade. It finally finished 97.92 points or 0.25 per cent lower at 38,756.63. On similar lines, the NSE Nifty slipped 24.40 points or 0.21 per cent to close at 11,440.05. Bharti Airtel was the top loser in the Sensex pack, skidding 3.46 per cent, followed by Bajaj Finance, PowerGrid, SBI, HDFC Bank, Sun Pharma, Kotak Bank and ICICI Bank. HCL Tech was the star performer, soaring 10.08 per cent, after the company said its revenue and operating margin for the September quarter are expected to be “meaningfully better” than the top end of its previous forecast.
TCS, Infosys, Tech Mahindra and Titan too ended with up to 5 per cent gains. “Indian benchmark indices gave up its gains and closed with a negative bias. IT stocks outperformed following a strong showing by HCL tech, which benefited most… However, the broader markets outperformed, especially the small-cap index, after Sebi tweaked MF norms for multi-cap funds. This Sebi measure would require more exposure to small-cap stocks in most multi-cap funds, leading to the current buying interest. “Global cues were also mostly positive on renewed vaccine optimism. Inspite of all the optimism, a correction due to valuations or various uncertainties cannot be ruled out and volatility is expected to continue. Trade cautiously and look at earnings stability, if investing for the long-term in small-caps,” said Vinod Nair, Head of Research at Geojit Financial Services. BSE telecom, bankex, finance, energy, FMCG and metal indices fell up to 2.09 per cent. On the other hand, IT, realty, teck, consumer durables and industrials rose as much as 4.76 per cent.
Broader BSE mid-cap and small-cap indices outperformed the benchmarks, rallying up to 4.03 per cent. On the macroeconomic front, S&P Global Ratings slashed its FY21 growth forecast for India to (-) 9 per cent, from (-) 5 per cent estimated earlier, saying that rising COVID-19 cases would keep private spending and investment lower for longer. Global markets were largely positive following AstraZeneca’s announcement that it has resumed phase-3 trials for a COVID-19 vaccine. Bourses in Shanghai, Hong Kong, Seoul and Tokyo ended with gains, while stock exchanges in Europe opened on a tepid note. Meanwhile, global oil benchmark Brent crude was trading 0.85 per cent lower at USD 39.49 per barrel.
In the forex market, the rupee pared some of its early gains and closed 5 paise higher at 73.48 against the US dollar.