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July 24, 2024 6:05 pm

Markets sink below record levels; Sensex tanks over 400 points on widespread profit booking

Mumbai, July 10

Equity benchmark indices Sensex and Nifty buckled under heavy selling pressure to sink below record high levels on Wednesday, tracking deep losses in metal, auto and IT stocks amid widespread profit booking after recent gains.

Rising uncertainty over interest rate cut by the US Federal Reserve also added to the weak trend in domestic equities, traders said.

The 30-share BSE Sensex opened 129.72 points higher to hit a fresh all-time high of 80,481.36. However, the index soon tumbled 915.88 points or 1.13 per cent to trade at 79,435.76. It finally closed lower by 426.87 points or 0.53 per cent at 79,924.77.

The NSE Nifty also hit its record 24,461.05 in opening deals but pared all gains to decline 291.4 points or 1.19 per cent to 24,141.80 intra-day. It dropped 108.75 points or 0.45 per cent to settle at 24,324.45.

“The Indian market experienced profit booking ahead of the upcoming earnings season. The expectations are muted, given the moderation in sales growth due to a slowdown in the world economy and consolidation in margins driven by high inflation.

“Additionally, the market is under temporary risk towards high budget expectations, which appears well factored in the last one month’s rally,” said Vinod Nair, Head of Research, Geojit Financial Services.

In the Sensex pack, Mahindra & Mahindra tanked over 6 per cent after the company cut the prices of its SUV models to boost demand.

Mahindra & Mahindra said its XUV700’s fully-loaded AX7 range now starts at Rs 19.49 lakh, a price cut of over Rs 2 lakh.

Tata Steel, Tata Consultancy Services, HCL Technologies, State Bank of India, JSW Steel, Tata Motors and Kotak Mahindra Bank were other losers.

On the other hand, Asian Paints, NTPC, Power Grid, Adani Ports and Bharti Airtel were the winners.

“The intraday slide in the index has slightly dented sentiment, but resilience in certain pockets limited the damage,” Ajit Mishra – SVP, Research, Religare Broking Ltd, said.

A total of 2,574 stocks declined, while 1,365 advanced and 82 remained unchanged on the BSE.

In the broader market, the BSE smallcap gauge declined 0.69 per cent, while the midcap index dipped 0.19 per cent.

Among the indices, auto declined 1.65 per cent, metal (1.60 per cent), IT (0.99 per cent), commodities (0.87 per cent), consumer discretionary (0.78 per cent), teck (0.76 per cent) and industrials (0.62 per cent).

In contrast, healthcare, utilities and power were the winners.

“Markets had been hitting new highs over the past few weeks, and hence, investors resorted to profit-taking because of the stretched valuations of Indian equities.

“While several sectoral stocks have run up sharply ahead of their fundamentals, the upcoming earnings of many of these companies will show if the rise is justified or not. Also, investors would look to churn their portfolios ahead of the Budget and trim their exposure in risky stocks,” Prashanth Tapse, Senior VP (Research), Mehta Equities Ltd, said.

In Asian markets, Shanghai and Hong Kong settled lower, while Seoul and Tokyo ended higher.

European markets were trading higher in the mid-session deals. US markets ended on a mixed note in the overnight trade on Tuesday.

Global oil benchmark Brent crude climbed 0.24 per cent to USD 84.86 a barrel.

Foreign Institutional Investors (FIIs) bought equities worth Rs 314.46 crore on Tuesday, according to exchange data.

The BSE benchmark climbed 391.26 points or 0.49 per cent to settle at a new closing peak of 80,351.64 on Tuesday. The NSE Nifty went up by 112.65 points or 0.46 per cent to 24,433.20 — its record closing high.

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