A day after record rally, Sensex falls nearly 400 points3 min read . Updated: 21 May 2019, 04:36 PM IST Surajit Dasgupta
- Nifty barely managed to hold 11,700 level
- On Monday, Sensex and Nifty saw their biggest single-day gain in 10 years
Indian markets fell sharply today, reversing gains that earlier pushed key indexes to a record. The Sensex ended 383 points lower at 38,969, after clocking a new high of 39,571 earlier in the session. The broader Nifty ended 1% lower at 11,709, after it had hit a new high of 11,883. On Monday, Sensex and Nifty saw their biggest single-day gain in 10 years after exit polls showed Prime Minister Narendra Modi was set to win a second term with an even bigger mandate than in 2014. The results of Lok Sabha election will be announced on May 23.
Banking stocks led the decline today with Nifty Bank index falling 1.5%. IndusInd Bank, PNB, SBI, Yes Bank and ICICI Bank fell between 1.5% and 3%.
"The focus for market participants throughout this week would be on election outcome. The markets are pricing in a clear victory for the NDA government and hence any disappointment on the result day could lead to correction. Going forward in the medium term, notwithstanding the near-term rally, we expect the markets to consolidate post the election outcome (even if favourable) as focus would shift back to fundamentals (corporate earnings) and global cues which has been volatile due to re-escalation of trade tensions between US-China," said Jayant Manglik, president of retail distribution at Religare Broking.
Further, he added, movement in crude oil prices which has been gaining momentum after US ended Iran sanction waiver and currency will also provide direction to the markets.
As far as levels are concerned, 11,650–11600 would act as a key support zone for Nifty and on the higher side, 11800-11883 would act as intraday hurdles, says Sameet Chavan, chief analyst for technical and derivatives at Angel Broking.
Elsewhere, Jet Airways shares today surged 15% after Hinduja Group said it is evaluating a possible bid for the debt-laden carrier.
In contrast, global markets gained today, after US temporarily eased trade restrictions imposed last week on China's Huawei. In Europe, the broader Euro STOXX 600 edged higher while earlier in the day, China's Shanghai Composite index ended 1.23% higher.
US President Donald Trump's government added Huawei to a trade blacklist last week, escalating trade tensions between the world's two biggest economies. Washington then allowed Huawei Technologies Co Ltd to purchase American-made goods to maintain existing networks and provide software updates to existing Huawei handsets until August 19. (With Agency Inputs)
Sobha Limited shares surge
Shares of realty firm Sobha Ltd surged over 5% in noon trade. Sobha Ltd has posted 73% growth in its consolidated net profit at ₹113.3 crore for the quarter ended March on higher sales. Total income rose to ₹1,421.6 crore in the fourth quarter of 2018-19 fiscal from ₹789.2 crore in the corresponding period of the previous year.
Motilal Oswal maintains buy on BPCL
State-run Bharat Petroleum Corporation Ltd on Monday posted a 16% increase in net profit at ₹3,125 crore for the quarter ended 31 March, 2019. The company had posted a profit of ₹2,689 crore in the corresponding quarter last year. Revenue rose 10% to ₹83,942 crore from ₹76,080 crore in the year-ago period. Domestic brokerage Motilal Oswal has maintained "buy" on the stock with with target price of ₹375, citing "inexpensive valuation". "We expect GRM to rebound in FY20 due to IMO and normalisation of gasoline cracks. Given the stock’s inexpensive valuation of 6.6x FY21E EV/EBITDA, we maintain ‘buy’ with target price of ₹375/share," the brokerage said in a note. BPCL shares are down 5% at ₹
Bajaj Finance extends gains to fifth day, market cap hits ₹2 trillion
Bajaj Finance shares have extended gains to the fifth day, rising 20% over this period, after its strong earnings. Meanwhile, its market cap has hit ₹2 trillion mark, the second NBFC to have market capitalisation of more than ₹2 trillion. (Read: Bajaj Finance crosses ₹2 trillion market cap as shares hit fresh high)
Tata Motors shares fall 5%
The automaker on Monday announced its fourth-quarter earnings. It earned a net profit of ₹1,117 crore, beating the Street's estimates of ₹338 crore, though lower than ₹2,125 crore a year earlier. "The weakening outlook for the India business is
fading the cost-cutting-led recovery at JLR. FY21 could be a tough year for
India and JLR. Further, the noise around EVs, Brexit and trade-war adds to the uncertainty," says domestic brokerage Motilal Oswal, which has a neutral rating, with target price of ₹199. Tata Motors shares were down around 5% to ₹180 in early trade.
Rupee flat against US dollar
The Indian rupee opened little changed against US dollar as traders avoided taking long positions ahead of final outcome of general election due on May 23.
The rupee traded at 69.73 a dollar in early trade, up 0.01% from its previous close of 69.74.
Tata Motors returns of profit
Tata Motors earned ₹1,117 crore in net profit in January-March, beating the Street's estimates of ₹338 crore, though lower than ₹2,125 crore a year earlier.
Revenue from its wholly owned subsidiary Jaguar Land Rover Automotive Plc fell 5% to ₹65,146 crore. The unit brings in most of Tata's revenue. On Monday, Tata Motors shares closed up 7.5% at ₹190 ahead of the results.
Analysts Say Mid-Caps May Shine
According to analysts, the Nifty MidCap gauge’s valuation is near the cheapest since 2012 relative to the main NSE Nifty 50 Index despite Monday’s surge. That signals potential for further gains in case of a favorable electoral verdict, according to analysts including Sameet Chavan of Mumbai-based Angel Broking Ltd.
Dharmesh Kant, head of retail research at Indianivesh Securities, also remains bullish on the prospects of midcap stocks. “If actual results are close to what exit polls indicate, we expect beaten down mid- and small-cap stocks to take center stage," said Dharmesh Kant, head of retail research at Indianivesh Securities. “The rally has the potential to throw up multi-baggers from the mid-cap segment."