Sensex erases early gains, sheds 46 points, but logs best quarter in 11 years


Mumbai: A decline in index heavyweights such as Reliance Industries (RIL) and HDFC Bank weighed on Sensex as it erased early gains to end in the red on last day of June quarter. The benchmark index, however, logged its best quarterly performance in 11 years. Weakness in European equity markets, caution ahead of Prime Minister Narendra Modi’s address to the nation and extension of lockdown in a few states hurt the sentiment on Street.

For the quarter ended June, Sensex and Nifty rose 18.5 per cent and 19.8 per cent, respectively, posting their best quarterly gains in 11 years, in sync with the rise in world equities as stimulus measures to tide over the Covid-19 crisis pumped up the markets.

A total of Rs 25.68 lakh crore of investor wealth was generated in the quarter in terms of addition to market capitalization of listed stocks on the BSE.

“The markets were impacted by the uncertainties surrounding PM’s address to the nation. Irrespective of this, many Indian cities, are extending their lockdowns in the face of unabated growth in virus infections, which has added to the uncertainty surrounding economic recovery,” said Vinod Nair, Head of research at Geojit Financial Services.

“The market direction for tomorrow may also largely be guided by the content of the PM’s address and global cues,” he added.

On Tuesday, Sensex shed 46 points to close at 34,916, while peer Nifty declined 10 points to close at 10,302.

Agencies

BSE Sensex snip 30

Sensex winners & losers (Source: BSE)

RIL contributed the most to Sensex’s decline as it dropped 1.15 per cent, while private lender HDFC Bank shed 0.99 per cent. FMCG major ITC and top software exporter Tata Consultancy Services (TCS) shed 1.32 per cent and 0.93 per cent, respectively.On the other hand, top car maker Maruti Suzuki advanced 2.77 per cent while Nestle India added 2.63 per cent. Private lender ICICI Bank rose 2.42 per cent.

The market breadth tilted in favour of the bears with declining shares beating advancing ones in the ratio of 1.2:1 on the BSE.

In the broader market, BSE midcap and smallcap indices dropped 0.14 per cent and 0.75 per cent, respectively.

Among the sectoral indices, BSE Oil & Gas index dropped the most, down 1.51 per cent. BSE Energy and BSE Telecom followed next with a 1.30 per cent and 1.26 per cent decline, respectively.

BSE Auto index was the top gainer as it raced ahead 1.05 per cent ahead of auto sales figure for the month of June.

Raymond dropped 3.40 per cent as the company reported a consolidated net loss of Rs 69.10 crore for the fourth quarter ended March, impacted by the coronavirus-induced lockdown. The company had posted a net profit of Rs 67.70 crore during the January-March quarter of the previous fiscal.

State-run ONGC dropped 1.21 per cent ahead of quarterly earnings later in the day. The oil & gas major is expected to report an up to 60 per cent drop in profit on 20-25 per cent plunge in net sales.

Vodafone Idea dropped 4.50 per cent ahead of its quarterly earnings announcement. The telecom major is likely to report lower losses and higher revenue sequentially for the quarter to March, the first full quarter when the ailing company will reap the benefit of the tariff hikes of up to 40% it had imposed in December.

Markets at a glance:

  • Sensex, Nifty rise 18.5%, 19.8% in June quarter, log best gains since June 2009
  • Today, Sensex fell 0.13%, or 46 points to close at 34,916
  • Nifty shed 0.10% or 10 points to close at 10,302
  • 16 Sensex stocks close lower
  • Top Sensex losers: Power Grid shed 1.88%, Sun Pharma 1.84%, Airtel 1.34%
  • Top Sensex gainers: Maruti up 2.77%, Nestle 2.63%, ICICI Bank 2.42%
  • Market breadth negative; advance-decline ratio at 1:1.2
  • Broader markets fall; BSE Midcap down 0.14%, SmallCap 0.75%
  • BSE Oil & Gas top sectoral loser, shed 1.51%; OMCs fell 1.95%-3.91%
  • BSE Energy declined 1.30%; AlphaGeo down 6.08%, Gulf Oil 3.94%
  • BSE Auto top sectoral gainer, up 1.05%; Bosch rose 4.19%, MRF 3.18%
  • Raymond slipped 3.4% on disappointing Q4 results
  • ONGC, Voda Idea down ahead of Q4 earnings

European stocks slipped on Tuesday, with banks and energy firms leading the losses at the end of a strong quarter, while UK markets took a hit from a worse-than-expected GDP reading, Reuters reported. The pan-European STOXX 600 index fell half a per cent. Earlier, Asian shares advanced on as positive economic data from China and the United States helped to close out a strong quarter, though a renewed surge in global coronavirus cases underlined a challenging investment climate, a Reuters report said. MSCI’s broadest index of Asia-Pacific shares outside Japan was up 0.51 per cent.

  • Surge in coronavirus cases

A spike of 18,522 coronavirus cases in past 24 hours took India’s tally of total infections to 5,66,840 even as the recovery rate further improved to 59.06 per cent. This is the second day of decline in fresh Covid cases. On Sunday, 19,906 fresh cases were reported while on Monday 19,459, according to health ministry figures. Meanwhile, the death toll has climbed to 16,893 with 418 new fatalities in 24 hours, according to the latest Union Health Ministry data.

  • Extension of lockdown in select states

The government on Monday announced the guidelines for Unlock 2.0, which will be in force till July 31. While the country has entered the Unlock 2.0 mode, a few states such as Maharashtra, Tamil Nadu, Jharkhand, Nagaland and Assam have announced lockdown extension in an attempt to flatten the Covid-19 curve.

What to watch out for:

  • The rise in new coronavirus cases is a major cause of concern.

  • The direction of global markets will be closely monitored as the domestic market tends to follow suit.

  • The political and border developments between India and China will be closely monitored.

  • The June quarter corporate earnings will provide a better picture of the damage caused by the coronavirus-induced lockdown.

  • June auto sales data will be closely watched.





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