Sensex Closes 217 Points Lower, Nifty Settles At 10,936; Pharma Stocks Lead Declines
Domestic stock markets started the week on a weak note, with the BSE Sensex falling 217 points. That marked a further retreat from record highs registered recently. While the 30-scrip BSE benchmark index settled 0.6 per cent lower at 36,323, the NSE Nifty settled at 10,936, registering a loss of 82 points, or 0.7 per cent. Losses in the key indices were led by energy and pharma stocks, while weakness in other Asian markets further dampened investor sentiment. Among the top laggards on the Nifty 50 were Dr Reddy's Laboratories, Lupin, Sun Pharma and Tata Steel, finishing between 4.6 per cent and 9.5 per cent lower.
Here are 10 things to know about Monday's trading session:
1. Thirty five stocks on the 50-scrip Nifty finished in the negative zone.
2. Healthcare stocks fell with Nifty Pharma index dropping 4.1 per cent. Dr Reddy's Laboratories fell 9.3 per cent, after a US court granted Indivior a preliminary injunction, blocking the Indian company from selling generic versions of the British drug maker's bestselling opioid addiction treatment in the United States.
3. Energy shares took a beating after crude prices dropped as concerns around supply disruptions eased, while traders eyed potential supply hikes by Russia and other oil producers. Reliance Industries slipped 1.9 per cent.
4. "Continuous decline on broader front has pushed the stocks in extreme oversold zone so we may see some pause or rebound prior to further slide,” said Jayant Manglik, president, Religare Broking. “Weak global cues deteriorated the conditions further and triggered selling across the board. Mostly sectoral indices traded under pressure wherein pharma, metal and realty lost maximum."
5. ICICI Bank shares closed more than 3 per cent lower, after reports that the bank has hired a law firm to look into allegations of irregularities in some loan accounts.
6. However, some buying in IT stocks limited the downside. Infosys, which closed 2 per cent higher, led the gains in the sector and was among the top gainers on both indices. Infosys had last week reported its earnings for the April-June period. Brokerages remained upbeat on the growth outlook for India's second-biggest IT firm, even as it missed market estimate for the June-quarter results.
7. Government data on Monday showed wholesale inflation, based on Wholesale Price Index (WPI), accelerated to a four-and-a-half year high of 5.77 per cent in June.
8. Investors also turned cautious after government data released last week showed that the country's trade deficit widened to a more than three-and-a-half-year high, say analysts. The trade deficit soared to $16.6 billion in June on costlier crude oil imports.
9. Foreign portfolio investors (FPIs) sold shares worth a net Rs 1,104.65 crore on Friday while domestic institutional investors (DIIs) net bought shares worth Rs 872 crore, according to provisional data from the NSE.
10. Asian shares declined after official data showed China's economy slowed slightly in the second quarter, compounded by fears of a full-scale Sino-US trade war looming over markets. MSCI's broadest index of Asia-Pacific shares outside Japan dropped 0.43 per cent.
(With agency inputs)