Market loses steam on profit-booking; mixed global cues weigh

A day after logging healthy gains, Indian equities lost steam on September 27 on account of profit-booking amid mixed global cues.

A fall in global crude oil prices and rupee’s rise against the US dollar capped the losses of the market.

“The market traded rangebound and settled with a cut of over half a percent amid mixed cues. After the weak start, Nifty hovered in a range till the end; however, the stock-specific movement kept participants busy. In line with the benchmark index, most sectoral indices witnessed profit taking and ended lower,” said Ajit Mishra, Vice President, Research, Religare Broking.

“The market is expected to consolidate further with the bias on the positive side. We feel the upcoming RBI monetary policy review meet could trigger the next directional move. Meanwhile, we suggest continuing with the stock-specific trading approach and focusing more on the index majors for short-term trades,” Mishra added.

The 30-share Sensex closed the day with a loss of 167 points, or 0.43 percent, at 38,822.57, with 20 stocks in the red.

Vedanta, Yes Bank, Tata Steel, IndusInd Bank and ONGC ended as the top losers, whereas Bajaj Finance, Bharti Airtel, ITC, Reliance Industries and Kotak Mahindra Bank emerged as the top gainers in the Sensex index.

The Nifty index finished 59 points, or 0.51 percent, lower at 11,512.40. Among the 50 stocks in the index, 39 suffered losses.

Among the broader indices, BSE Midcap and Smallcap underperformed Sensex, ending 0.62 percent and 0.81 percent lower, respectively.

Except for BSE Telecom (up 1.11 percent) and Energy (up 0.13 percent), all other sectoral indices suffered losses, led by BSE Metal (down 2.77 percent) and Realty (down 2.56 percent).

As many as 278 stocks, including CG Power and Industrial Solutions, Indiabulls Integrated Services, Coffee Day Enterprises and Lakshmi Vilas Bank, touched their lower circuits on BSE.

On a weekly basis, both key indices Sensex and Nifty climbed by over 2 percent.

Top news of the day:

The US has asked Pakistan to prosecute terrorists like Hafiz Saeed and Masood Azhar, saying the reduction of the Indo-Pak tensions would depend on Islamabad’s seriousness in taking action against those who engage in “cross-border infiltration”.

India’s oil imports from Iraq surged to a record high in August as refiners replaced costly African imports with cheaper Basra crude, tanker arrival data obtained from industry and shipping sources showed, reported Reuters.

Total liabilities of the government increased to Rs 88.18 lakh crore at end-June 2019 from Rs 84.68 lakh crore at end-March 2019, according to the latest data on public debt.

Stocks in news:

Extending the losses into the fourth consecutive session, shares of Indiabulls Housing Finance cracked 6.11 percent to settle at Rs 389.45 on BSE on September 27 amid reports that a public interest litigation (PIL) has been filed against the company at the Delhi High Court, alleging round-tripping of funds by the company.

Shares of Yes Bank fell 4.41 percent to Rs 48.80 after Yes Capital Private Limited (YCPL), one of the promoters of the company on September 26 sold 1.8 percent shareholding in the bank.

Shares of Cox & Kings ended 2 percent higher at Rs 4.06 after reports that the company has kickstarted the process to sell assets to raise around Rs 5,000 crore by putting travel and leisure, visa processing and UK businesses on the block.

Shares of Tata Motors slipped 3.69 percent to Rs 119.90 after its UK arm, British carmaker Jaguar Land Rover (JLR), said on September 27 it would suspend production for a week after the planned Brexit date of October 31 as a ‘prudent’ measure.

Shares of Reliance Capital declined 4.60 percent to close at Rs 28 after Brickwork downgraded the rating of the company’s NCDs and debentures.

Shares of Unitech tanked 4.69 percent to touch their 52-week lows of Rs 0.61 after the real-estate company was issued a show-cause notice by the Noida authority.

Shares of Strides Pharma Science settled with a loss of 7.79 percent at Rs 303 after the company had suspended sales of ranitidine tablets in the US market. The company has received an Information Request (IR) from the USFDA to provide the test data related to Nnitrosodimethylamine (NDMA) impurities in Ranitidine tablets.

The share price of Lakshmi Vilas Bank remained locked at 5 percent lower circuit at Rs 36.55 after the Economic Offences Wing had registered an FIR upon the directors of the company.

Global update:

European shares rose on September 27 with London-listed mining stocks driving gains due to a weaker pound, while hopes of a quick resolution to the US-China trade war offset worries about slowing economic growth, reported Reuters.

Among the Asian peers, China’s Shanghai Composite Index inched up 0.11 percent to 2,932.17, while Korea’s Kospi plunged 1.19 percent to end at 2,049.93. Japan’s Nikkei ended 0.77 percent lower at 21,878.90.

Technical view on the market:

Nifty traded in a narrow range today and formed an inside bar on the daily chart. After an initial gain at the beginning of the week, the index got stuck in a range throughout the week.

The weekly chart shows that the consolidation is taking place above the key weekly moving averages, which is a healthy sign for the larger uptrend.

“On the daily chart, the Nifty had left a gap recently, which it can come down to close. The lower end of the gap area is 11,381, which would act as key support for the index. So, buy on dips would be the preferred strategy for Nifty from a short-term perspective. Positional traders can look to initiate a fresh long position near 11,400-11,380. The short term targets onthe higher side will be the recent high of 11,694 and the 78.6 percent retracement of the June – August decline at 11,790,” said Gaurav Ratnaparkhi, Senior Technical Analyst at Sharekhan by BNP Paribas.Get access to India’s fastest growing financial subscriptions service Pro for as little as Rs 599 for first year. Use the code “GETPRO”. Pro offers you all the information you need for wealth creation including actionable investment ideas, independent research and insights & analysis For more information, check out the website or mobile app.