Equities took a breather on Tuesday after a three-session record setting run as investors dialled down fresh bets amid grim macroeconomic data and firm crude prices. The Sensex shed 72 points to end at 34,771.05, while the broader Nifty finished at 10,700.45 points, down 41.10 points. However, IT stocks surged on widespread buying after a Morgan Stanley report said Indian IT services shares are set for a turnaround in 2018 as recovery in spending is “imminent”.
Overall sentiment turned weak after data released after market hours on Monday showed that the country’s trade deficit, or difference between imports and exports, reached USD 14.88 billion in December, up about 41 per cent year-on-year, as crude oil and gold import bill inflated. The BSE 30-share barometer, after a higher start at 34,877.71, advanced to 34,936.03 in morning trade on continued buying by investors driven by encouraging quarterly earnings. However, across-the-board profit booking at record levels pulled it down to a low of 34,735.55. It finally settled 72.46 points, or 0.21 per cent lower at 34,771.05.
The gauge had gained 410.44 points in the previous three sessions and closed at an all-time high of 34,843.51 on Monday. The wider NSE Nifty too slipped from record but managed to close above the crucial 10,700 mark at 10,700.45 points, down 41.10 points or 0.38 per cent. It shuttled between 10,762.35 and 10,687.85 during the session. On Monday, it had closed at a new life-time high of 10,741.55. “Widened fiscal deficit and increasing fuel price on account of volatility in crude prices dampened the market sentiment. “Mid and small caps underperformed but silver lining was seen in IT index on expectation of turnaround in spending,” said Vinod Nair, Head of Research, Geojit Financial Services.
Meanwhile, domestic institutional investors (DIIs) sold shares worth Rs 173.28 crore on net basis, while FIIs bought equities to the tune of Rs 32.92 crore on Monday, provisional data showed. Coal India was the biggest loser among Sensex components, falling by 4.57 per cent, followed by Reliance Industries at 2.54 per cent. Other laggards included Tata Motors, Tata Steel, ITC Ltd, SBI, Power Grid, Bharti Airtel, M&M, Asian Paints, HDFC Ltd, Hero MotoCorp, Kotak Bank, IndusInd Bank, Yes Bank, Axis Bank, Maruti Suzuki and Bajaj Auto, losing up to 2.30 per cent.
In contrast, IT counters like Wipro, Infosys and TCS were the top three performers in the Sensex pack, rising up to 4.88 per cent. Stocks of state-run oil marketing companies faced the selling heat on higher global crude prices, which continued to quote at near three-year high of USD 70 a barrel due to production curbs in OPEC nations and Russia. HPCL, BPCL and IOC slipped by up to 3.35 per cent.
Sectorally, the BSE realty index emerged as the worst performer by falling 3.51 per cent, followed by metal 2.83 per cent, PSU (2.26 per cent), oil and gas (1.84 per cent), power (1.78 per cent), infrastructure (1.54 per cent), consumer durables (1.29 per cent), FMCG (1.12 per cent) and auto (1.12 per cent). IT and teck rallied by 3.32 per cent and 2.45 per cent, respectively. The small-cap index fell 2.21 per cent, while mid-caps declined 1.74 per cent.
In the Asian region, Japan’s Nikkei rose 1 per cent, Hong Kong’s Hang Seng clocked its highest ever close by gaining 1.81 per cent, while China’s Shanghai Composite Index inched up 0.77 per cent. In the Eurozone, Frankfurt’s DAX was higher by 0.41 per cent, while Paris CAC 40 rose 0.21 per cent in their early deals. London’s FTSE was up 0.16 per cent.