Markets end lower on selling in IT stocks, fresh foreign fund outflows

Benchmark stock indices Sensex and Nifty settled lower on Thursday following selling in information technology (IT) and banking shares and investors remaining in a wait-and-watch mode ahead of the outcome of the US-India trade talks.

 

The 30-share BSE Sensex dropped 375.24 points or 0.45 per cent to settle at 82,259.24. During the day, it fell by 415.21 points or 0.50 per cent to 82,219.27.

 

The 50-share NSE Nifty closed lower by 100.60 points or 0.40 per cent to 25,111.45.

 

Fresh foreign fund outflows and subdued quarterly earnings dented investors' sentiment, experts said.

 

Among Sensex firms, Tech Mahindra declined nearly 3 per cent after its June quarter earnings failed to cheer investors. IT services firm Tech Mahindra reported a nearly 34 per cent year-on-year increase in consolidated net profit to ₹1,140.6 crore for the quarter ending June 30, on the back of growth in communications and financial services verticals.

 

Infosys, HCLTech, Eternal, Larsen & Toubro, Tata Consultancy Services, and Axis Bank were also among the laggards. However, Tata Steel, Trent, Titan and Tata Motors were among the gainers. 

 

Foreign Institutional Investors (FIIs) offloaded equities worth ₹1,858.15 crore on Wednesday, according to exchange data. "Indian equity benchmarks ended marginally lower as investors exercised caution amid subdued Q1 earnings announcements, particularly in the technology and banking sectors. Market participants remained sidelined due to elevated valuations of largecap stocks and FII outflows owing to the uncertainty regarding US-India trade deal; however, any positive developments could amplify market sentiment," Vinod Nair, head of research, Geojit Investments Limited, said.

 

The BSE smallcap gauge climbed 0.30 per cent and midcap index went up by 0.07 per cent. Among BSE sectoral indices, BSE Focused IT tanked 1.47 per cent, followed by IT (1.33 per cent), tech (1.06 per cent), bankex (0.51 per cent) and, utilities (0.25 per cent). Realty jumped 1.22 per cent, metal climbed 0.62 per cent, commodities (0.42 per cent), healthcare (0.28 per cent) and, consumer discretionary (0.25 per cent).

 

“Markets largely remained in the negative zone amid uncertainty over the impending announcement of the India-US tariff outcome, as investors resorted to selling in banking, IT and oil & gas shares that led the downfall in key benchmarks. Once the deal is announced and if it suits the interests of both the countries, there will be a relief in the markets and we may see short-term spurt, else the sluggish to pessimist mood could continue. ,”Prashanth Tapse, senior VP (Research), Mehta Equities Ltd, said. 

 

In Asian markets, South Korea's Kospi, Japan's Nikkei 225 index and Shanghai's SSE Composite index settled in the positive territory while Hong Kong's Hang Seng ended lower. European markets were trading higher. The US markets ended higher on Wednesday.

 

Global oil benchmark Brent crude dipped 0.06 per cent to USD 68.49 a barrel.

 

On Wednesday, the Sensex edged up 63.57 points or 0.08 per cent to settle at 82,634.48. The Nifty ended 16.25 points or 0.06 per cent higher at 25,212.05.