Stock Market Erases Gains to Close in the Red

The domestic stock markets started strongly today, extending yesterday’s gains on solid macro numbers. However, the Indian stock market indices gave up gains made in the day’s first half to close in the red. The weak opening of global bourses forced the Indian stock market indices to end the day with marginal losses. 

Uncertainties weigh down global markets due to tightening monetary policies and fears of a recession. Investors’ confidence was hammered as the US Dollar opened sharply higher against the Indian Rupee and other emerging market currencies. The Indian stock markets were volatile as the Nifty 50 couldn’t absorb the selling pressure from call writers. 

The power index was up by 0.6%, while the metal index gained 0.4%. However, automobiles, IT, real estate and the banking sector faced selling pressure. The Nifty 50 faced a roller coaster ride as it swung wildly in a broader range. It failed to latch on to the 16,000 level and ended the day 25 points lower to close the day at 15,810.85 points. The BSE Sensex slipped by 732 points from its intraday high to close the day 100 points lower at 53,134.35. 

The Nifty 50 was powered by Shree Cements, Power Grid Corporation, Bajaj Finserv, HUL and ONGC, which rose by 1.72%, 1.42%, 1.24%, 1.13% and 1.11%, respectively. The BSE Sensex was led by Power Grid, Bajaj Finserv, HUL, Sun Pharma and RIL, which rose by 1.64%, 1.21%, 1.12%, 0.83% and 0.8%, respectively.

The top losers on the Nifty 50 were HDFC Life Insurance Company, ITC, Wipro, Maruti and Britannia, which fell by 1.81%, 1.76%, 1.45%, 1.23% and 1.09%, respectively. Moreover, ITC, Wipro, Maruti, L&T and IndusInd Bank were the top losers on the BSE Sensex and fell by 1.73%, 1.58%, 1.13%, 1.12% and 0.98%, respectively. The Sensex and the Nifty 50 were initially supported by strong Asian cues, which was strengthened by strong buying in banking stocks and a rebound in energy, pharma and metal stocks. 

The Indian indices surrendered their gains in the second half of the day as European markets and US Futures fell. Moreover, the optimism surrounding US-China talks around tariff reduction melted away as fear of a global recession kept the stock markets on tenterhooks. 

The BSE Smallcap Index rose by 0.2%, while the BSE Midcap Index fell by 0.3%. Moreover, the Indian rupee fell by 41 paise to close at a record low of 79.36 against the US Dollar. However, the Indian stock markets are expected to take cues from the June quarter earnings season and Wednesday’s US Fed meeting minutes.

For any clarifications/feedback on the topic, please contact the writer at cleyon.dsouza@clear.in