Sensex, Nifty Fall As Fed’s Rate Hike Talks, Weak China Data Spook Investors
Indian shares dropped like nine pins after a combination of weak Chinese export data and talks of an U.S. Federal Reserve rate hike coming “relatively soon” spooked investors.
The S&P BSE Sensex declined 1.5 percent to 27,643 while the NSE Nifty too fell 1.5 percent to close at 8,673. The 50-share index briefly slipped below the 8,550-mark – a critical support area watched by technical analysts.
If Nifty breaks 8,500 tomorrow morning, we can see levels of 8,000 and if it holds on to 8,500, it will continue to consolidate between the range of 8,500-8,750.”Jay Thakkar, senior technical analyst at Sharekhan told BloombergQuint in a telephonic conversation.
The market breadth was firmly skewed in favour of the sellers at 1,206 declines, 295 advances and 44 stocks remaining unchanged.
Unwarranted exuberance is getting punished time and again, said Ajay Srivastava, managing director of Dimensions Consulting. Public sector banks led the fall today after indecisiveness on debt recast has cast a cloud on hopes surrounding the pace of banks’ recovery.
The Bank Nifty closed below the 19000-mark first time since August 12 of this year. Barring the S&P BSE IT index, all other 18 sectoral gauges closed lower.
While today’s fall might seem steep, Srivastava said, the market continued to show signs of inherent strength. “We are relatively insulated from any external shocks at the moment. Of course, there will be knee-jerk reactions from time-to-time but that would be limited to just that,” he told BloombergQuint in a telephonic interview.
Overall, he advises investors to “stick to good quality names”.
Cyient Soars 14% on Q2 Earnings Boost
Shares of the midcap IT firm rose as much as 13.8 percent to Rs 552 after it reported a 31 percent sequential jump in second quarter net profit. A Bloomberg poll of analyst had estimated a net profit of Rs 87.1 crore for the quarter.
It clocked a net profit of Rs 97.2 crore for quarter-ended September, compared to Rs 74 crore previous quarter. Net sales came in at Rs 913 crore versus Rs 834 crore, quarter-on-quarter.
Hindustan Unilever Falls for a Third Day
Shares of the FMCG firm dropped 1.6 percent to Rs 861, extending its losing streak to day three.
According to its parent Unilever, market conditions in India were weaker in July to September period. As a result, it said volume growth and rural demand in the country was under pressure.
“Rs 864 is not a good level to enter the stock. The stock can see further downside towards levels of Rs 770. Once it gets to that level, we will take a fresh call on it.”Jay Thakkar, senior technical analyst at Sharekhan said.
Market At Day’s Low; Nifty Bank Below 19,000 First Time Since Aug
Indian shares extended their fall following weak trade European equities as an unexpected decline in Chinese exports stoked worries about the health of the global economy.
Concerns about corporate earnings and speculation of tighter U.S. monetary policy have also weighed on equities, with the Nifty Bank index falling below the 19,000-mark for the first time since August 12 of this year.
All 19 sectoral gauges on the BSE are seeing selling pressure, with the S&P BSE Realty index leading the list of losers, while S&P BSE IT index dropped the least.
The S&P BSE Sensex fell as much as 1.6 percent to 27,635 while the NSE Nifty dropped 1.6 percent to 8,566. This it steepest fall for the indices since September 29, when the Nifty made a low of 8,558 after the Indian Army announced that it had carried out surgical strikes beyond the LoC.
The market breadth was firmly in favour of the sellers at 1,344 declines, 260 advances and 271 stocks remaining unchanged.
Sentiment indicators for Indian equity markets are approaching the “sell zone”, according to Morgan Stanley.