Sensex, Nifty on Wednesday: Top laggards included Tata Steel, Hindalco Industries, Vedanta and Tata Motors.
Stock markets retreated from record highs on Wednesday, with the BSE Sensex falling 146 points. The Sensex closed at 36,373, down 0.4 per cent, while the NSE Nifty settled 27 points, or 0.25 per cent, lower at 10,980. The markets fell after a no-confidence motion was moved and accepted against Prime Minister Narendra Modi’s government in Parliament. Metal and auto stocks witnessed a selloff that dragged the key indices lower. Twenty eight stocks on the 50-scrip Nifty index finished with losses. Top laggards included Tata Steel, Hindalco Industries, Vedanta and Tata Motors – ending between 2.5 per cent and 5.3 per cent lower.
Metal stocks and consumer stocks took a hit with Tata Steel plunging 5.3 per cent and Hindustan Unilever falling 2.1 per cent. The Nifty Metal index – comprising metal stocks – closed 3.2 per cent lower.
Analysts said the no-confidence motion against the government affected the markets. “Though BJP enjoys full majority, this development added to uncertainty in markets,” said VK Sharma, head private client group and capital market strategy at HDFC Securities.
Midcap and smallcap stocks, which had pushed the markets higher in recent sessions, fell with the BSE sub-indices declining 1 per cent each. The Nifty Mid cap 50 index dropped 1.7 per cent.
“Investors are pulling out money from midcap stocks as they are worried about the earnings potential. So, they are putting money in good (large-cap) companies even if the valuations are expensive,” news agency Reuters cited Kotak Securities vice president Sumit Pokharna as saying. “Uncertainty is killing the market right now,” he said.
Punjab National Bank (PNB), Indian Overseas Bank and Corporation Bank rose in early trading on reports that the government will infuse Rs. 11,336 crore ($1.66 billion) in five state-run banks. However, the stocks shed gains later on concerns that the infusion may not result in earnings growth. PNB finished 4.3 per cent lower. The Nifty PSU Bank declined 0.84 per cent.
“It would be advisable to protect long positions in Nifty with strict stop loss of 10,900 on closing basis. One should remain cautious till Nifty managed to close above double top resistance level of 11,080,” added Mr Sharma.
On the other hand, ONGC closed 2.7 per cent and was among the top gainers on the Nifty. Advances in the stocks came after reports that ONGC has authorised government to sell its 49 per cent stake in helicopter service provider Pawan Hans.
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