Indian indices broke below crucial support levels on July 29 hit by a fall in auto stocks, persistent selling by foreign investors, muted corporate results, and sharp fall in bond yields.
The S&P BSE Senses fell nearly 200 points while the Nifty 50 broke below the crucial psychological support at 11,200 levels.
The final tally on D-Street – the S&P BSE Sensex fell 196 points to 37,686 while the Nifty50 closed 95 points lower at 11,189. The next big support for the index is placed at 11,140 which is also the 200-days moving average (DMA).
Indian bond yields dropped sharply after the finance minister said the government won’t change its plan to issue sovereign bonds and that she hopes the Reserve Bank of India makes more rate cuts. India’s benchmark 10-year bond yield fell as much as 11 bps to 6.42 percent on Sitharaman’s comments.
“Increase in auto registration cost, lack of liquidity and confusion over the issuance of India sovereign bond impacted the market. Rate cut expectation is high as FM is looking for significant ease in interest rate to spur economic growth,” Vinod Nair, Head of Research, Geojit Financial Services Ltd told Moneycontrol.
“But, the undercurrent is not very supportive since insipid Q1 result is adding clouds over the near-term visibility,” he said.
The selling pressure was wide-spread wherein auto, metal and media counters were thrashed badly. In the broader market, the S&P BSE Midcap index fell 0.67 percent while the S&P BSE Smallcap index was down 1.03 percent.
The S&P BSE Auto index fell 3.5 percent, followed by the S&P BSE Metal index which was down 3.01 percent, and the S&P BSE Telecom index ended 2.85 percent lower.
ICICI Bank and IT majors such as Infosys and TCS capped the downside. Top Nifty gainers include names like ICICI Bank, HCL Tech, TCS, and Infosys.
On the losing side, Indiabulls Housing Finance fell 10 percent, followed by Grasim Industries, Tata Motors, and Vedanta.
Stocks in news:
The share price of Vodafone Idea touched a 52-week low of Rs 6.56, down 26 percent as the company reported poor numbers for the quarter ended June 2019.
ICICI Bank gained 3 percent after the company posted a better number in the quarter ended June 2019 (Q1FY20).
Indiabulls Group stocks fell 5-10 percent after a media report indicated that Subramanian Swamy wrote a letter to PM Modi alleging a big fraud in the group.
Havells India fell 4 percent after the company reported a 16.3 percent year-on-year (YoY) decline in June quarter consolidated profit on muted growth in key segments like cables, lighting, and switchgear.
Maruti Suzuki shares fell 4 percent after the company reported 27.3 percent year-on-year (YoY) drop in standalone profit to Rs 1,435.5 crore, despite a three-fold jump in other income.
European markets are trading cautiously on Monday as the US and China are likely to meet in Shanghai for trade talks.
Asian markets ended lower as investors waiting for US-China trade negotiations to start in Beijing this week. Shanghai Composite shed 0.12% at 2,941.01, Kospi slipped 1.78% at 2,029.48 and Nikkei fell 0.19% to 21,616.80.