Lacklustre Monday- Sensex closes down 241 points, Nifty ends at 20,133; metals, pharma and select IT stocks drag

Lacklustre Monday: Sensex closes down 241 points, Nifty ends at 20,133; metals, pharma and select IT stocks drag

It’s been a rather lacklustre Monday session fro Dalal Street after the indices scaled new highs the previous week. Trading was primarily rangebound as the indices took a breather awaiting policy decisions by key Global Central Banks. The Nifty closed well below last week’s highs at 20,133.30, down 0.29%. The Sensex too declined by more than 240 points and shut shop at 67,596.

Vinod Nair, Head of Research at Geojit Financial Services said,”Domestic markets relinquished their momentum as they anticipated a raft of policy rate decisions due this week. The investor’s confidence was also impacted by the expectations of a demand resurgence in China, combined with crude supply cuts. With the Fed rate hike fears backon the cards, as reflected in the elevated US bond yields, the markets await clarification from major central banks.”

Milind Muchhala, Executive Director – Julius Baer India ppinted out that “However, caution is advised, especially in the small and microcap segments. The overall market conditions appear favourable, with stable macro-economic indicators, easing inflation, healthy corporate earnings in Q1FY24, and strong liquidity flows, including domestic investments through SIPs. But there are potential sources of intermittent volatility, such as the US Fed’s actions, rising commodity prices (especially crude oil), uncertain monsoon impact on crop production, upcoming state elections, and soft rural consumer demand.”

He is betting on large caps and explianed that “Favoring large cap and larger midcap names is suggested, while profit-taking in stocks (especially momentum ones) that have surged recently may be prudent. Despite intermittent corrections, the overall positive outlook for Indian markets remains, driven by economic growth, strong corporate earnings, robust expected inflows, and valuations in line with historical averages. Interim corrections should be viewed as opportunities to increase equity exposure for long-term investors.”

Shrikant Chouhan, Head of Research (Retail), Kotak Securities pointed out that the “Markets finally reversed the 11-session winning streak as profit-taking came into play in banking, realty, IT and telecom stocks. Along with concerns over rising global crude oil prices and uptick in dollar index and US treasury yields, investors trimmed their exposure ahead of the outcome of the US FOMC meeting on interest rates on Wednesday. Other than global headwinds, higher domestic index valuations after the recent upsurge is making investors nervous, which may lead to some more profit-taking in the near-term.”

Meanwhile it was another closing low for the rupee and that too impacted sentiment. Dilip Parmar, Research Analyst, HDFC Securities said, “Ahead of the holiday, the Indian rupee closed at another record low close following risk-averse sentiments and a rally in crude oil prices. This week will remain highly volatile following a series of central bank policy rate meetings across the developed and emerging market economies. The baseline of it is the dollar to hold onto its strength through the week.”

Markets will remain shut on Tuesday, September 19 on account of Ganesh Chaturthi.