Sensex snaps seven-day winning run, falls 288 pts; Nifty50 ends at 17,656

Profit-booking comes to play, investors dump FMCG, pvt banking stocks

The benchmark Sensex’s seven-day winning streak was snapped on Tuesday as investors reassessed risks such as hawkish central bank policies and prospects of an earnings downgrade. Declines in consumer goods stocks, index heavyweight Reliance Industries (RIL), and banking stocks dragged the markets.

The S&P BSE Sensex fell 288 points, or 0.5 per cent, to finish at 59,544, while the National Stock Exchange Nifty50 fell 74 points, or 0.42 per cent, to close at 17,656.

In the preceding seven trading sessions, the Sensex had risen nearly 2,600 points, or 4.54 per cent — its longest winning streak in nearly a year. The Nifty added 717 points, or 4.2 per cent, during this period.

Shares of fast-moving consumer goods (FMCG) major Hindustan Unilever (HUL) fell close to 3 per cent for the second straight day. Shares of Nestlé India dropped 2.8 per cent. Nestlé India and HUL were the top downers among the Sensex’s 30 companies. Big leaguer RIL fell 1.5 per cent and was the biggest drag on the index.

Nine of the 19 BSE sectoral indices ended with losses, with the FMCG index falling the most at 1.1 per cent.

“The domestic market pared its early gains with FMCG and private banks pressuring the benchmark. Market attention has shifted to central bank policy announcements since the European Central Bank is expected to hike interest rates at its upcoming policy meeting. The impending US gross domestic product data will give additional clarity to the expectation that the US Federal Reserve (Fed) will temper its aggression with regard to rate hikes,” said Vinod Nair, head-research, Geojit Financial Services.

On opening, the markets had edged higher, with the Sensex touching an intraday high of 60,081, and the Nifty climbing to 17,812. 

On Tuesday, overseas funds sold shares worth Rs 247 crore, while domestic institutions were buyers to the tune of Rs 873 crore.

“Markets witnessed profit-taking amid mixed global cues. The trend was mixed on the sectoral front wherein FMCG and energy majors were under pressure, while automotive and information technology tried to save the day. Interestingly, the broader indices outperformed the benchmark and ended almost on a flat note,” said Ajit Mishra, vice-president-research, Religare Broking.

The Nifty Midcap 100 rose 0.45 per cent, while the Nifty Smallcap 100 fell 0.13 per cent on Tuesday. The India VIX index fell 3 per cent to 16.9.

During the ceremonial one-hour trading on Monday evening, the benchmark indices had risen close to 1 per cent in what was their biggest Muhurat day gain in 14 years.

During Samvat 2078, the Sensex and the Nifty had dropped over a per cent each amid sharp retreat in most global markets due to rising bond yields, following the Fed’s hawkish pivot to reel in runaway inflation.

Market players are expecting the benchmark indices to post double-digit gains in Samvat 2079.

Over the next year, the market faces several headwinds and tailwinds. Fears of recession, sustained monetary tightening, and rising geopolitical tensions are factors that could besiege performance.

On the other hand, there’s overriding optimism that the worst of inflation is over and an expected pick-up in the domestic economy, coupled with hopes of improvement in corporate financials, could buttress the markets.