Sensex falls below 53k-mark in early trade, Nifty sub-15,850; FMCG, pharma stocks drag

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Equity benchmark Sensex edged lower on Thursday dragged by losses in index heavyweights HDFC Bank, HUL and RIL. At 10:40am, Sensex was at 52,913.39, down 141.37 points or 0.27%, while Nifty retreated 47.70 points or 0.30% to 15,831.95.

Gainers & losers

IndusInd Bank, Bajaj Auto and NTPC, up around 1% each, were top Sensex gainers followed by TechM, Titan and PowerGrid. HUL, Sun Pharma, Nestle and HDFC Bank were among the laggards.

Sectoral Strand

Most sectoral indices on the NSE were in the red. Nifty FMCG and Nifty Pharma, falling about 0.5% each were the top sectoral laggards. On the other hand, Nifty Media and Nifty Realty advanced 0.5% each.

“A distinct trend in currency market recently has been the steady depreciation of INR from around 72.50 to the dollar in May to around 74.60 now. Apart from the gains to the IT and pharma industry INR depreciation augurs well for other major exporters like textiles and auto ancillaries which have done well in Q4 FY 21 and is all set to improve both top and bottom lines in FY22. While the steady rise in the dollar index is an EM negative, it is getting neutralized by the sharp dip in the US 10-year yield to 1.32 %. FIIs turning buyers (Rs 533 cr yesterday) after sustained selling for many days removes a major concern of an imminent big correction triggered by large-scale FII selling. Nifty breaking 15900 level and sustaining above that appears a big challenge,” said V K Vijayakumar, Chief Investment Strategist at Geojit Financial Services.

The earnings season for quarter one of the current financial year begins today with IT major Tata Consultancy Services (TCS) slated to it announce it numbers today.

Modi cabinet reshuffle

The Centre allocated portfolios to the newly inducted ministers. While Home Minister Amit Shah will be in charge of the newly created Ministry of Cooperation, Ashwini Vasihnaw has been given ministries of Railways, Communications and Electronics and Information Technology. Kiren Rijiju will be the new Minister of Law and Justice. Rajnath Singh continues to be in charge of the Defence, Finance Minister Nirmala Sitharaman will also be the Minister of Corporate Affairs.

As many as 43 leaders including Jyotiraditya Scindia, Narayan Rane and Sarbananda Sonowal Wednesday took oath as part of the Cabinet expansion of the Prime Minister Narendra Modi-led government. Fifteen Cabinet ministers, including some new faces, were sworn in at the swearing-in ceremony held in the Darbar Hall of the Rashtrapati Bhawan.

Global markets

Asian markets traded mixed on Thursday, as Chinese tech stocks in Hong Kong came under pressure after regulatory fears resurfaced.

Beijing recently announced stepping up in oversight on Chinese listings in the U.S., many of whom are tech companies. That came after a recent crackdown on ride-hailing giant Didi and other tech firms, which once again raised concerns over the regulatory outlook.

The S&P 500 rose to a fresh record on Wednesday as investors poured back into trusty mega-cap technology stocks.

The Federal Reserve’s minutes from its June 15-16 meeting, during which it held short-term interest rates near zero but also indicated that it might be adjusting policy otherwise in the months ahead, revealed the central bank discussed tapering but was in no rush to start the process.

Investors also likely continued to monitor the Covid situation regionally. The Japanese government is set to declare another Covid-19 state of emergency in Tokyo until August 22, as per reports. Meanwhile, Australia’s New South Wales state announced Wednesday a week-long extension of Sydney’s lockdown.