The Nifty50 index closed 0.3 per cent lower at 18,423.35, while the BSE-Sensex ended at 61,716.05 points, down 0.1 per cent. Both the indices had fallen over 0.5 per cent at one time during the session.
The losses in the market were deeper in the midcap and smallcap stocks with the Nifty Midcap 100 and Nifty Smallcap 100 index slumping 2.6 per cent and 1.8 per cent, respectively, as investors were caught in a whirlwind last hour selling in the market.
The losses in the market were deeper in the midcap and smallcap stocks with the Nifty Midcap 100 and Nifty Smallcap 100 index slumping 2.6 per cent and 1.8 per cent, respectively, as investors were caught in a whirlwind last hour selling in the market.
The losses in the market stood in contradiction to the global market, which saw healthy gains. Asian equities closed with strong gains, while European markets were trading in the green at the time of closing bell at home.
Sentiment among investors was initially affected by the tepid commentary by Hindustan Unilever following its September quarter earnings. While the company’s earnings were largely in line, the management’s comment that rural demand had moderated in the past two months and that input cost inflation is likely to sustain raised concerns over the demand environment going ahead.
HUL said it was still “cautiously optimistic” about demand recovery at a time when analysts and investors were factoring in robust pent-up demand in the economy due to unlocking post a severe second wave of the pandemic and high vaccination rate.
HUL’s comments caused profit-booking in other consumer-facing sectors such as automobiles, home appliance makers and FMCG companies. The Nifty India Consumption index slumped over 2 per cent reflecting investors’ cautiousness.
Sentiment among retail investors was cautious after two of their favourite bets – ITC and IRCTC – suffered deep losses in the market. Shares of IRCTC plunged 15 per cent in the closing hours of the session as traders rushed to book profits fearing the stock’s futures contract to enter a ban in the F&O segment.
Profit booking in IRCTC had a cascading effect on other sectors with high retail investor presence such as PSU stocks and realty stocks, said dealers. The Nifty PSU Bank index and Nifty CPSE index sank 3.7 per cent and 1.9 per cent, respectively. The Nifty Realty index nosedived nearly 5 per cent.
“The market witnessed some volatile movements after a failed attempt to overcome the Nifty 50 resistance level of 18600. The market shows that it is going to be crucial for the short-term market scenario to sustain above the 18350-18400 Nifty50 Index support zone,” said Ashis Biswas, Head of Technical Research at CapitalVia Global Research.
Among specific stocks, cigarette companies’ shares were battered led by ITC’s 6.3 per cent fall after media reports said that the government has formed a new panel to look at taxation on tobacco products. Analysts fear that the formation of the panel could lead to higher taxes on cigarettes in the upcoming Budget 2022-23.
Shares of Infosys and Reliance Industries and helped mitigate some of the losses in the benchmark indices as both stocks continue to remain a favourite among institutional investors, said dealers.
Overall, the breadth of the market was weak as nearly four stocks fell on the National Stock Exchange for every one stock that rose.
