Sensex snaps 11-day winning streak, Nifty falls 60 pts; PSU banks rally up to 18%

Domestic equity markets snapped their winning run and settled lower on Monday on the back of muted global cues ahead of the US Fed's meeting due later this week. Traders avoided any unwarranted positions during the truncated trading week ahead of the Fed's meet outcome and rate hike cues.

Back home, state run banks were on a role for the day. Jupiter Life Line Hospitals, the debutant for the day, extended its gains after a strong listing pop. However, selling pressure in heavyweights like banking, financials and IT weighed on the market sentiments.

For the day, BSE's barometer Sensex dropped 241.79 points, or 0.36 per cent, to settle at 67,596.84, while NSE's Nifty50 gave up 59.05 points, or 0.29 per cent, to end at 20,133.30. Broader markets also settled in red as BSE midcap and smallcap indices fell about half a per cent each. Fear gauge India VIX declined about a per cent to 10.84-level.

"Markets finally reversed the 11-session winning streak as profit-taking came into play in banking, realty, IT and telecom stocks. Higher domestic index valuations after the recent upsurge is making investors nervous, which may lead to some more profit-taking in the near term, said Shrikant Chouhan, Head of Research (Retail), Kotak Securities .

"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," he said.

On a sectoral front, the Nifty PSU bank index gained more than 3 per cent, while the Nifty auto and FMCG indices added about a per cent each. The Nifty realty, media and metal indices dropped more than a per cent each, while the Nifty IT, healthcare and private bank indices also posted big cuts.

Among the sectors, PSU Banking was the top performer by the end of the day, while Auto and Energy sectors also performed well. On the flip side, Realty, Media, and Metal were the laggards. After a strong bullish candle, Nifty50 has formed a bearish candle on the daily chart which indicates a probable pause in its northward journey, said Aditya Gaggar, Director at Progressive Shares.

In the Nifty50 pack, Hindalco dropped more than 2 per cent, while HDFC Bank, Adani Ports and Dr Reddy's Laboratories also posted similar cuts. Bharti Airtel, Adani Enterprises, Infosys, Ultratech Cement, Wipro and Tata Steel were the other key laggards for the day.

Among the gainers, Power Grid and Titan Company gained about 3 per cent each. They were followed by HDFC Life Insurance Company, Mahindra & Mahindra, Bharat Petroleum and NPTC which gained about 2 per cent each. Britannia Industries, Hero MotoCorp and Bajaj Finserv were other key gainers for the day.

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, said Vinod Nair, Head of Research at Geojit Financial Services. "With the Fed rate hike fears back on the cards, as reflected in the elevated US bond yields, the markets await clarification from major central banks," he said.

A total of 3,947 shares were traded on BSE on Monday, of which 1,693 settled with gains. 2,083 stocks ended the session with cuts while 171 shares remained unchanged. A total of 370 shares hit their upper circuit, whereas the 235 shares tested the lower circuit levels for the day.

In the broader markets, Vodafone Idea tumbled 7 per cent for the day, while Jaiprakash Associates fell 6 per cent each day. Raymond and Andrew Yule & Company declined over 5 per cent for the day. Jupiter Wagons, Lloyd Steels, GRM Overseas and GTL Infra were also down 5 per cent each.

Among the gainers, KIOCL hit an upper circuit of 20 per cent, while Indian Overseas Bank gained about 18 per cent. UCO Bank surged 15 per cent for the day, while Ramco Systems surged over 14 per cent. Easy Trip Planners and Punjab & Sindh Bank settled 12 per cent up each.

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