Profit-booking hits the market; Sensex, Nifty end 2019 in the red

The Indian market ended in the red on December 31, as investors took money off the table on the last day of the calendar year 2019.

Market barometer Sensex remained in the red throughout the session, tracking weak global cues while lack of any fresh positive trigger kept investor sentiment low.

The 30-share Sensex settled 304 points, or 0.73 percent down at 41,253.74 with 24 stocks in the red. The Nifty50 pack finished 87 points, or 0.71 percent, lower at 12,168.45.

On the other hand, the BSE Midcap closed flat while the BSE Smallcap index logged a gain of 0.37 percent.

However, on a yearly basis, the benchmarks wound up CY19 with gains as the 30-share Sensex gained 14.38 percent and Nifty logged a gain of 12 percent. BSE Midcap and Smallcap indices are down 3 percent and 6.85 percent, respectively, for the year.

Experts point out that the Indian equities underperformed most of the developed markets and few of the emerging markets in CY19.

The polarisation seen in CY18 continued in CY19 with only a handful of stocks contributing to the returns in Nifty50. There has been a clear divide in the economy and the market.

“We expect the divide between Indian equities and economy to continue in CY20 because there may not be a quick recovery in the economy but the market may do relatively better on account of strong earnings and favourable tax changes,” said Rusmik Oza, Senior VP and Head of Fundamental Research-PCG at Kotak Securities.

“High expectations from the budget could lead to a good start for Indian equities in 2020. To address the global slowdown, we expect central banks of the developed nations to follow a loose monetary policy in CY20 which could provide ample liquidity and scope for further inflows into emerging markets,” Oza said.

Stocks & sectors

Most sectoral indices closed with losses on December 31. Energy, Telecom, Auto, IT and Teck indices fell up to 1 percent on BSE. BSE Utilities, on the other hand, ended 0.83 percent higher.

Volume spike of 100-300 percent was seen in stocks like Tech Mahindra, PFC, NTPC, GAIL, BHEL and Infosys.

Long Build up – PFC, Indiabulls Housing Finance, Coal India, GAIL and NTPC

Short Buildup – Zee Entertainment, Piramal Enterprises, Dish TV, Tech Mahindra and Bosch

Stock in news

Shares of PTC India Financial Services climbed nearly 3 percent after getting a sanction for a fresh long-term loan. The infrastructure finance company received the fresh sanction of Rs 500 crore from Bank of India.

Shares of water engineering company Va Tech Wabag rallied 9 percent after the company was granted a project from the Bihar government.

Shares of NTPC climbed 2 percent after it said 800 MW unit of its Darlipali Super Thermal Power Project in Odisha has become operational.

Shares of Indiabulls Housing Finance gained for the third consecutive session, ending with a gain of 2.07 percent on December 31, following timely payment of interest and principal related to NCDs.

Shares of Bank of India (BoI) climbed by a percent after reports emerged that the company is eyeing to acquire AXA’s stake in BOI AXA Mutual Fund.

Technical View

Nifty formed a long negative candle on the daily chart after the formation of a slightly lower top at 12,286 levels of the last session. Experts say, technically, this pattern could be a cheering factor for bears to make a comeback from the highs.

“Nifty is currently placed near the immediate support of 12,120 and a move below this support could open up short-term downward correction in the market. The important reversal pattern is yet to be confirmed at the highs,” said Nagaraj Shetti, Technical Research Analyst at HDFC securities.

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