Profit booking causes drop in Nifty and Sensex

Indian benchmark indices began Monday's trading on a positive note due to a sharp uptick in heavyweight HDFC Bank but failed to sustain their rally as the session progressed. A significant sell-off in Kotak Mahindra Bank and other heavyweights pulled the indices lower, resulting in a negative finish for the day.

Profit booking by investors at higher levels added further pressure to the market. The Nifty 50 wrapped up the session with a drop of 0.29%, closing at 24,781, while the Sensex finished the trading day down by 0.09%, closing at 81,151. 

Of the 50 stocks in the Nifty,  36 closed in the red, with Tata Consumer Products led the decline at 7%. This was followed by Kotak Mahindra Bank, Bajaj Finserv, BPCL, and IndusInd Bank-- all of which experienced losses exceeding 3%.

Other notable stocks such as Trent, Adani Enterprises, Adani Ports & SEZ, Hindalco Industries, Britannia Industries, Cipla, Bajaj Finance, Bharat Electronics, UltraTech Cement, and Grasim Industries recorded declines of over 1.5%.

On the gainers' side, Bajaj Auto, HDFC Bank, Asian Paints, Mahindra & Mahindra, and Eicher Motors posted gains of up to 4.3%.

Significant selling pressure

In contrast, the broader market experienced significant selling pressure today, with the Nifty Midcap 100 index plunging 1.66% to 57,677 points. The Nifty Smallcap 100 index fell to 18,797 points, down 1.47% from the previous closing level.

The Q2 earnings season has provided little cause for optimism thus far, exhibiting generally subdued underlying trends across sectors. This has adversely affected investor sentiment, as most stocks are trading at elevated valuations that necessitate strong performance to sustain these levels.

Commenting on today's market performance, Vinod Nair of Geojit Financial Services said, "The domestic market displayed considerable volatility, with key indices swinging between negative and positive terrain. PBOC has further reduced interest rates by 25 bps to support its struggling economy. Meanwhile, FIIs continued their strategic buying in China while selling off in India, driven by weaker corporate earnings and valuation concerns. Concurrently, domestic Q2 earnings have been mostly underwhelming, with major private sector banks notably disappointing. However, DIIs have offered some support, mitigating the market’s decline."

Nifty Auto Index

Among sectoral indices, the Nifty Auto Index concluded the session with a gain of 0.34%, marking its second consecutive day of gains. The rebound in Bajaj Auto shares, supported by Mahindra & Mahindra, significantly contributed to the index's positive performance.

Aside from the auto sector, all other major indices closed in the negative territory. The Nifty Media index fell by 2.6%, while the Nifty Metal, Nifty Oil & Gas, Nifty FMCG, Nifty Realty, and Nifty IT indices all recorded losses of over 1%. On the other hand, the Nifty bank ended the session with a cut of 0.25% at 51,962 points.

(By arrangement with livemint.com)