Sensex, Nifty Snap Two-Day Winning Streak As Banking Shares Drag

The S&P BSE Sensex and NSE Nifty 50 indexes snapped two days of gains on Monday as banking, financial services, energy, telecom and metal shares came under selling pressure. The benchmarks traded on a strong note for most part of the day, supported by gains in information technology shares. However, they erased gains in last hour of trade wherein Sensex dropped as much as 656 points from its highest level recorded during the session and the broader NSE Nifty 50 benchmark briefly dropped below the 11,400 mark.

The Sensex ended 98 points or 0.25 per cent lower at 38,757 and Nifty 50 fell 24 points or 0.21 per cent to close at 11,440.

Six of 11 sector gauges compiled by the National Stock Exchange ended lower, led by Nifty Bank index's 1.3 per cent decline. Nifty Financial Services, FMCG, metal, energy and pharma indexes ended lower.

On the other hand, information technology shares witnessed strong buying during the session after HCL Technologies informed exchanges that its revenue and operating margin for the September quarter will be meaningfully better than it guided when it announced June quarter earnings. The Nifty IT index surged nearly 5 per cent to a record high.

Media and real estate shares also witnessed buying interest.

Mid- and small-cap shares rallied after market regulator Securities and Exchange Board of India (Sebi) tweaked asset allocation norms multi-cap mutual funds.

Bharti Airtel was top Nifty loser; the stock dropped 4 per cent to close at Rs 473. Bajaj Finance, BPCL, Power Grid, State Bank of India, Grasim Industries, Hindalco, Sun Pharma, HDFC, HDFC Bank, Kotak Mahindra Bank and Axis Bank also fell 2-3 per cent each.

On the flip side, HCL Technologies rallied 11 per cent to close at Rs 796. TCS, Wipro, Tech Mahindra, UPL, Infosys, Adani Ports, Tata Motors and Titan were among the other gainers.

The overall market breadth was positive as 1,828 shares ended higher while 928 closed lower on the BSE.