Sensex ended 180 points lower at 38,877
Sensex ended 180 points lower at 38,877

Nifty halts 4-day rally after hitting record high: 10 things to know

  • Oil marketing companies HPCL, BPCL and IOC ended with sharp losses
  • Banking stocks also came under pressure

Indian markets ended lower today, failing to hold on to gains after hitting new highs during the session. Snapping a four-day rally, benchmark index Sensex ended 180 points lower at 38,877, after hitting a new high of 39,270. The broader index Nifty hit a new high 11,761 before settling 0.60% lower at 11,643. Sentiment was hit after private weather forecasting agency Skymet said that it expects below normal monsoon this year. Investors also remained cautious ahead of Reserve Bank's policy decision, scheduled tomorrow. (Read: Sensex’s roller-coaster journey: From 100 to 39,000)

Here are 10 updates from stock markets:

1)"After four straight sessions of healthy gains, the Indian markets took a breather, ending the session in the red, largely led by profit taking, as investors preferred to remain cautious ahead of RBI monetary policy," said Jayant Manglik, president of retail distribution of Religare Broking.

2) The RBI will announce its interest rate decision tomorrow, due at 11:45 am, amid expectations of a cut in key lending rate by another 25 basis points to boost economic activities.

3) However, the central bank's inflation outlook will be closely watched in view of Skymet's forecast of below normal monsoon and rising oil prices.

4) "Tomorrow’s RBI monetary policy would provide further direction to the markets. Soft inflation and muted domestic macro data have increased probability of a rate cut. Further, monetary policy committee’s commentary on future interest rate and inflation trajectory would be closely monitored by the market participants," said Jayant Manglik of Religare Broking.

5) On the global front, movement of crude oil prices, which are at five-month high and approaching $70 dollar, would remain on market radar.

6) Some analysts expect volatility to remain high in the near term. Sahaj Agrawal, head of research for derivatives at Kotak Securities, said: "After a strong rally seen in the recent past, Nifty currently is in a consolidation phase. Tech parameters suggest possibility of extended consolidation before the upmove resumes. We continue to believe the bias remains positive."

7) On the downside, Nifty has strong support at 11,200-11300, said Sahaj Agrawal of Kotak Securities. "On the higher side we would expect 12300-12500 on Nifty. Banking is expected to witness some profit-booking," he said.

8) Banking shares today saw some profit-taking after outperforming in the recent rally. The index for banking stocks, Nifty Bank, today ended 0.90% lower, with PNB, Yes Bank, ICICI Bank and SBI among top losers.

(Read: What is next for record-breaking Indian markets)

9) Infosys and TCS kick off the March quarter earnings season when they announce their earnings on 12 April. "From here on earnings will be the key as we get into the results season. Healthy earnings could push the market even higher, but disappointments will pose a challenge," said B Gopkumar, ED and CEO of Reliance Securities.

10) The selling pressure was broad-based with most of the sectoral indices ending in the red. Oil marketing companies HPCL, BPCL and IOC ended with sharp losses, down between 3% and 5%.