Profit booking pulls D-St lower; Nifty slips below 26K, Sensex ends flat

After hitting record highs for the fourth straight session, benchmark equity indices closed flat on Tuesday. Both the Nifty 50 and the Sensex created history earlier in the day, with the Nifty crossing the 26,000 mark and the Sensex crossing the 85,000 mark for the first time.

The 30-share BSE Sensex settled down 14 points, or 0.02%, at 84,914, while the broader NSE Nifty closed up 1 point, or 0.01%, at 25,940.

Nifty Auto, IT, Pharma and Oil & Gas ended the day in the green, while Bank, FMCG, Realty and Consumer Durables sectors closed lower.

Among individual stocks, the Indian Energy Exchange (IEX) tumbled 11.5% following reports that the Center is mulling implementation of market linkages for power exchanges.

Shares in AstraZeneca Pharma also closed up 17% after the government approved the import of durvalumab, a liver and gallbladder cancer drug.

Market breadth was skewed in favor of the bears. On the BSE, around 2,045 stocks declined, 1,932 advanced and 99 remained unchanged.

Expert opinions

“Domestic benchmarks are trying to sustain fresh highs driven by the US Fed’s aggressive rate cuts. Meanwhile, China’s central bank’s rate cuts, and additional stimulus measures have positively influenced global investor sentiment, resulting in gains for local metal stocks. In contrast, FMCG and higher profit-booking led to decline in banking stocks,” said Vinod Nair, head of research at Geojit Financial Services.

“In the near term, strong inflows from FIIs are expected to maintain momentum, driven by the dovish outlook of the US Fed and expectations of a rate cut by the RBI in October,” Nair added.

Rupak De, Senior Technical Analyst, LKP Securities, said, “The Nifty traded in a narrow range on Tuesday, taking a breather after a three-day rally. Short-term sentiment remains positive, with the index staying above the critical 21. Day EMA, daily RSI are bullish. However, to continue bullish, Nifty should break above 26,000 level decisively, till then we expect range-bound movement with fluctuations between 25,800 and 26,000 in next few hours to few days.”

Global markets

World stocks hit record highs on Tuesday after China unveiled stimulus measures to support its economy and stock markets, sending Asian and European stocks higher and boosting commodity prices.

The move sent Chinese stocks higher, with the blue-chip CSI300 index and the Shanghai Composite index each rising more than 4%. Hong Kong’s Hang Seng index jumped more than 4% to a four-month high.

The pan-European STOXX 600 index rose 0.8%, led by China’s open-pit mining and luxury stocks. German blue-chip DAX traded just below all-time highs.

The oil rises

News of a fiscal stimulus from top importer China and concerns that conflict in the Middle East could affect regional supplies lifted oil prices on Tuesday, while another storm threatened supplies in the United States, the world’s biggest crude producer.

Brent crude futures were up $1.34, or 1.8%, at $75.24 a barrel. US WTI crude futures rose $1.38, or 2%, to $71.75.

Rupee weakened

The Indian rupee weakened on Tuesday as rebalancing-related outflows to some global equity indices, along with demand for dollars from importers, weighed on the currency, even as most of its Asian peers gained.

The rupee closed at 83.67 against the US dollar, down 0.1% from the previous session’s close of 83.5525.

(with inputs from agencies)