Benchmarks decline further; realty stocks tumble

The domestic equity barometers further extended losses in early afternoon trade amid profit selling after a three-day rally. The Nifty traded below the 16,650 mark. Realty stocks witnessed profit booking.

At 12:23 IST, the barometer index, the S&P BSE Sensex, was down 497.85 points or 0.84% to 59,060.48. The Nifty 50 index fell 131.85 points or 0.74% to 17,648.15.

In the broader market, the S&P BSE Mid-Cap index fell 0.58% while the S&P BSE Small-Cap index shed 0.09%.

The market breadth was positive. On the BSE, 1,694 shares rose and 1,548 shares fell. A total of 108 shares were unchanged.

Economy:

IHS Markit India Services PMI came at 51.5 in January 2022 lower than 55.5 posted in December 2021. The headline figure pointed to the slowest rate of expansion in the current six month sequence of growth. The upturn was reportedly stymied by the intensification of the pandemic, the reintroduction of restrictions and inflationary pressures.

Commenting on the latest survey results, Pollyanna De Lima, Economics Associate Director at IHS Markit said, The escalation of the pandemic and reintroduction of curfews had a detrimental impact on growth across the service sector. Both new business and output rose at slight rates that were the weakest in six months. Concerns about how long the current wave of COVID-19 will last dampened business confidence and caused job shedding. Firms were also alarmed about price pressures. On this front, the latest PMI results brought worrying news as input prices increased at the sharpest rate in over a decade. Charges rose at a faster pace as some firms continued to transfer additional cost burdens to consumers, but the rate of inflation here was moderate as the vast majority of monitored companies left their fees unchanged since December. Private sector growth was sustained at the start of the year but, with the slowdown seen in services mirrored by manufacturing, there were weaker expansions in aggregate sales and output.

Buzzing Index:

The Nifty Realty index fell 1.73% to 486.95, amid some bit of profit booking. The index had advanced 7.23% in the past four sessions.

Godrej Properties (down 5.01%), The Phoenix Mills (down 3.23%), Oberoi Realty (down 1.84%), Macrotech Developers (down 1.12%) and Prestige Estates (down 0.96%) declined.

Meanwhile, Sunteck Realty (up 1.78%), DLF (up 0.61%), Brigade Enterprises (up 0.44%) and Indiabulls Real Estate (up 0.38%) bucked the trend.

Derivatives:

The NSE's India VIX, a gauge of market's expectation of volatility over the near term, declined 0.37% to 18.58. The Nifty 24 February 2022 futures were trading at 17,646.85, at a discount of 1.3 points as compared with the spot at 17,648.15.

The Nifty option chain for 24 February 2022 expiry showed maximum Call OI of 21.4 lakh contracts at the 18,000 strike price. Maximum Put OI of 40.7 lakh contracts was seen at 16,500 strike price.

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