Sensex falls 254 points in early trade, Nifty below 15,700; banks, financials drag
In early deals, Sensex slipped 254 points or 0.48% to 52,314, while Nifty 50 was quoting at 15,662 down 65 points or 0.41% from its previous close
Domestic equity benchmarks opened in the red on Friday tracking a weak trend in Asian markets amid rising concern over China’s inflation data and spike in Covid-19 cases. In early deals, Sensex slipped 254 points or 0.48% to 52,314, while Nifty 50 was quoting at 15,662 down 65 points or 0.41% from its previous close.
As many as 25 of 30 Sensex stocks were trading with losses. M&M, Axis Bank, IndusInd Bank, HDFC Bank & ICICI Bank were top laggards on the 30-share index, declining over 1% each. Tata Steel, Dr Reddy’s, Infosys, Bajaj Finserv and Tech Mahindra were among the gainers.
Barring Nifty Metal (up 0.47%) and Nifty Pharma (0.19%) all major sectoral indices on the NSE were in the red. Nifty Bank lost 1.04%, Nifty Auto declined 0.63%, Nifty FMCG was down 0.23%.
The broader market bucked the trend and was trading with gains. BSE MidCap index rose 0.28% at 22,738 and the BSE SmallCap index up 0.18% at 25,821.
“There is a sudden bout of negative news for markets. The elusive virus, which is foxing even the World’s best epidemiologists, has again become a threat with countries like South Korea and Australia imposing fresh restrictions. Tokyo Olympics closing to spectators is a sentiment negative,” said V K Vijayakumar, Chief Investment Strategist at Geojit Financial Services.
The 0.8 % cut in S&P 500 and deeper cuts in European markets indicate that the uptrend is temporarily halted. How deep the downtrend will depend on institutional behaviour and the retail investor response. The latter is a powerful market determining factor now. Without a doubt, the valuations are excessive and there is room for markets to correct significantly. ‘Buy on dips’ may not prove to be a good strategy now. Profit booking and increasing the cash component in the portfolio are advisable, added Vijayakumar.
Earnings today
Delta Corp, Excel Realty N Infra, Integrated Capital Services, K&R Rail Engineering, Madhucon Projects, Mapro Industries, Metalyst Forgings, Pil Italica Lifestyle, Suryavanshi Spinning Mills, Valencia Nutrition, and Vikas Lifecare will release their quarterly earnings for the quarter ended April-June 2021.
Global markets
Overseas, Asian stocks are trading lower on Friday as Covid worries resurfaced in the region.
China’s consumer price index for June rose 1.1% as compared with a year ago, data from the country’s National Bureau of Statistics showed on Friday. The producer price index for June rose 8.8% as compared with a year ago. The June PPI reading was a slight decrease in pace from the 9% increase in May.
Olympics organizers will ban spectators from the upcoming summer games in Tokyo, after a state of emergency for the city was declared by Japan on Thursday as the country sees rising Covid-19 cases. The state of emergency will last till August 22.
South Korea announced Friday that the greater Seoul area will be placed under the toughest social distancing rules of Level 4, as per reports. The city of Sydney earlier this week announced that Covid-19 restrictions would be extended by another week.
Wall Street lost ground on Thursday, with the S&P 500 and the Nasdaq pulling back from record closing highs in a broad sell-off driven by uncertainties surrounding the pace of the U.S. economic recovery.