Sensex ends 433 points lower, Nifty at 11,178; auto, banking stocks lead losses

Domestic benchmark indices erased early gains and ended 1%  lower each on Friday led by selling pressure in auto and banking stocks amid negative global equities. Sensex ended 433 points lower at 37,877 and Nifty fell 122 points to end at 11,178. Yesterday, Sensex ended 59 points lower at 38,310 and Nifty lost 7 points to 11,300. During the week, Sensex and Nifty have declined by 163 points and 35 points, respectively.

Traders said market participants turned cautious ahead of the Supreme Court AGR Case hearing today. Investors will also track the Wholesale Price Index (WPI) data, and trade data scheduled to be released later in the day for further cues.

April-June quarterly earnings announcements by Hindalco, NTPC, Glenmark Pharma, Berger Paints, United Breweries, Indian Bank, MRF, Fortis Healthcare, Greenply among others also kept the tone for the stock market bearish.

Eicher Motors, Tata Motors, M&M, Axis Bank, Bajaj Finance and Maruti were among the laggards. On the other hand, L&T, followed by Sun Pharma, Coal India, JSW Steel, Reliance Industries, Cipla, NTPC, Asian Paints, TCS and Infosys were among the top gainers on NSE. Sectorally, except metal and pharma, all the other indices closed bearish today, with banking, auto and Financials registering over 2% decline.

Meanwhile, retail inflation stood at 6.93% for July against 6.23% in the month-ago period, data released yesterday showed. The consumer price index (CPI)-based inflation rate for June has been revised from 6.09% to 6.23%.

Vinod Nair, Head of Research at Geojit Financial Services said,"Indian Markets tracked weak global cues in the latter part of the trading day to end with losses. The uncertainty was with regards to the US-China trade meet this weekend and a lack of wholesome pickup in economic activity in many countries, including China. The Indian retail inflation numbers that came in above the MPCs' target also put doubt on expected rate cuts by the RBI, which the market was looking forward to. Weak results, especially in the Auto sector, also contributed to the losses."

Global markets

Benchmarks opened on a bullish note on Friday, with Sensex rising 149 points to 38,459 and Nifty gaining 52 points to trade at 11,353. Although, domestic indices erased early gains on back of weak opening in European indices, led by negative US futures.

Asian stocks opened mixed on Friday as investors remained cautious after impasse over the next round of coronavirus aid worth $1 trillion in the US. Wall Street closed mixed led by lower than expected jobless claims but uncertainty over coronavirus aid package cast shadow.

By afternoon session, Dow Jones Futures fell off highs and traded 290 points lower. European markets also opened deep in red, dropping over 2% each amid rising concerns over the economic downturn due to the Covid-19 pandemic. Most major Asian equities also reversed the trend and fell in red territory.

Now, investors are tracking the US-China key trade talks scheduled on August 15, 2020. Breakthrough in the stalled US stimulus talks will decide the direction for equity markets.

Valuations

Benchmark earlier struggled to surpass 11350-11400 resistance and by the later session, breached the neckline around 11235-11175 support.

Geojit Financial in its note said," Should the 11375/444 region pose troubles again, the next turn lower could aim for 10640 with an intermediate stop at 10950. We would look for vertical rise above 11390, to cash bearish view aside."

Commenting on the week ahead, Vinod Nair, Head of Research at Geojit Financial Services said," Equity markets have run up globally, mainly on the back of the earnings results and related commentary. Focus is now slowly shifting to the macro numbers and investors are focusing on any sustainable green shoots of recovery, especially in the hard-hit sectors. The week ahead for the global markets will be shaped by the outcome of US-China meeting, and with Indian markets increasingly in sync with global cues, this could have an impact on the opening days of the week. Any indication of another stimulus package by the government will benefit the markets.  The focus will remain on earnings visibility and with liquidity remaining high, any corrections may be bought into. However, we advice to be in an accumulation mode and focus on quality stocks."

India continues to see the rising number of coronavirus cases, with new infections taking the total to 24.59 lakh mark today, with total deaths standing at 0.48 lakh. Worldwide, there are 210 lakh confirmed cases and 7.57 lakh deaths from COVID-19 outbreak.

Share Market Highlights: Sensex ends 433 points lower, Nifty at 11,178; Eicher Motors, Tata Motors top losers

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