Sensex, Nifty slip in early trade amid weak global cues; Polyplex Corporation down 7%; Adani Total & Adani Transmission up 5% each

Indian equity benchmarks traded lower in early deals on Wednesday, dragged by financials, banks and metal stocks. The 30-share BSE Sensex pack fell 52 points or 0.08 per cent to trade at 61,930, while the broader NSE Nifty moved 18 points or 0.10 per cent down to trade at 18,330. On the global front, Asian shares were last seen trading lower tracking an overnight fall in the US stock markets.

Back home, mid- and small-cap shares were positive as Nifty Midcap 100 rose 0.25 per cent and small-cap moved 0.30 per cent higher.

"The US debt ceiling impasse continues to affect markets. Since failure to reach a resolution will have catastrophic consequences for the global economy and markets, a resolution of the crisis at the eleventh hour is the most likely scenario. But markets will be on tenterhooks till then. A global risk-on and rally is the most likely scenario after the resolution of the impasse. The near-term scenario is uncertain but for long-term investors buying high conviction stocks on declines will fetch decent returns," said VK Vijayakumar, Chief Investment Strategist at Geojit Financial Services.

Foreign institutional investors (FIIs) continued their buying streak on Tuesday, purchasing equities worth Rs 183 crore. FIIs bought Indian shares in 18 out of the last 19 sessions.

Seven out of the 15 sector gauges -- compiled by the National Stock Exchange -- were trading in the red. Sub-indexes Nifty Financial Services, Nifty Bank and Nifty Metal were underperforming the NSE platform by falling as much as 0.25 per cent, 0.23 per cent and 0.34 per cent, respectively.

On the stock-specific front, Hindalco was the top loser in the Nifty pack as the stock cracked 0.84 per cent to trade at Rs 406.85. ICICI Bank, M&M, HDFC and HDFC Bank (HDFC twins) fell up to 0.67 per cent.

In contrast, Tech Mahindra, Dr Reddy's, Kotak Mahindra Bank, Britannia Industries and Maruti were among the top gainers.

The overall market breadth was positive as 1,669 shares were advancing while 1,139 were declining on BSE.

On the 30-share BSE index, Polyplex Corporation and Johnson Controls-Hitachi Air Conditioning India Ltd tanked up to 7.35 per cent. On the other hand, Narayana Hrudayalaya Ltd, TV18 Broadcast and Elgi Equipments climbed up to 6.58 per cent. Also, Two Adani Group stocks, Adani Transmission and Adani Total Gas, continued to hit their upper price bands of 5 per cent, respectively.

Sensex had edged 18.11 points, or 0.03 per cent, up to settle at 61,982 yesterday; while Nifty had moved 33.60 points, or 0.18 per cent, higher to close at 18,348.

 

Nifty outlook

 

"While Nifty puffed and huffed through resistances in the last couple of days, encouraging us to keep 18,660 in the radar, the turn lower from the vicinity of a recent peak may be seen as a rejection trade. This may call for a pullback or a consolidation, but an outright reversal may not play out unless we see below 18,200 on successive days. Meanwhile, expect upside bets to kick in today if Nifty manages to float above 18,282," said Anand James, Chief Market Strategist at Geojit Financial Services.

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