NEW DELHI :
Indian equities to hit a one-month low on Tuesday, amid a sell-off, led by a fall in information technology (IT), auto, metal and banking stocks. A decline in index heavyweights--TCS, ITC, Axis Bank, HDFC and Reliance Industries--exacerbated the fall.
Investors also exercised caution, staying away from placing large bets, ahead of a host of global as well as domestic macroeconomic data releases and key events due through the course of this week.
BSE Sensex closed 0.6% or 247.55 points lower at 40,40239.88 points, while the Nifty 50 index fell nearly 0.7% to 11,856.80 points. These levels were last seen on 13 November.
IT stocks fell for the second straight session today, as the rupee strengthened. Analysts expect appreciation in the rupee to hurt margins of these companies, which typically earn a chunk of their revenue in dollars. Tata Consultancy Services Ltd (TCS) fell 2.3%, Tech Mahindra Ltd was down 1%, Wipro Ltd shed 1% and HCL Technologies Ltd was 1.2% lower.
Yes Bank Ltd fell 10% ahead of its board meeting due later today. Media reports said the bank’s board is likely to reject Canadian industrialist Erwin Singh Braich's $1.2 billion bid at its meeting.
Among other banking stocks, RBL Bank fell 4.3%, Indusind Bank 2.6%, Axis Bank 2.3%, State Bank of India 1%, Allahabad Bank 4%, Union Bank of India 3.3%, Central Bank of India 3%, Syndicate Bank was down 2.4%.
Metal stocks also declined, with SAIL dropping 3.3%, JSW Steel 3%, Coal India 2.3%, Vedanta Ltd 1.3%, Hindustan Zinc 1.3%, and Tata Steel down 1%.
Auto stocks fell after data released showed that India’s passenger car sales remained under pressure in November, falling 10.8% from a year ago, marking the 13th straight month of decline, according to the Society of Indian Automobile Manufacturers. Hero MotoCorp fell 2.5%, TVS Motors 1.3%, M&M 1.3%, Ashok Leyland 0.7%, Tata Motors and Maruti Suzuki India fell 0.4% each.
Globally, investors remained anxious about the fast approaching deadline for a new round of US tariff on Chinese imports, while eying the US Federal Reserve and European Central Bank monetary policy review meetings later this week. Traders also focused on general elections in the UK scheduled on 12 December.
The US Federal Reserve’s Federal Open Market Committee will begin its two-day policy meeting later today. Markets widely expect the central bank to hold interest rates steady at the conclusion of the meeting Wednesday, having cut rates three straight times so far this year.
Back home, the government will release India’s retail inflation and factory output data on Thursday. Domestic consumer prices probably rose 5.22% year-on-year in November compared with a 4.62% gain in October. Industrial production likely contracted 4.8% in October compared with a 4.3% contraction in September, according to a Bloomberg survey.
"Market is likely to remain range-bound in near term as current Nifty valuation captures the sharp earnings recovery expected in FY21 and leaves limited room for upside. Going forward, market would be driven by CPI, IIP and WPI numbers scheduled for release this week. On the global front, US Fed and ECB meeting, along with Brexit and trade deal developments would drive the markets", said Siddhartha Khemka, head - retail research, Motilal Oswal Financial Services.
Meanwhile, net inflows into equity mutual fund schemes crashed to ₹1,690.48 crore in November, the lowest since ₹320 crore seen in June 2016, as soaring stocks prompted investors to cash out. The November figure, released by the Association of Mutual Funds in India (AMFI) on Monday, is 79.9% lower than the ₹8,414 crore worth of net inflows seen in November 2018 and 72% lower than ₹6,037.78 crore in October 2019.