Market pauses historic 2-day rally on profit-taking
Mumbai, Sep. 24 (PTI): Market participants scrambled to book profits on Tuesday, pausing the stellar two-day rally in benchmarks Sensex and Nifty as investor euphoria over the surprise corporate tax cut tapered off.
The 30-share Sensex opened on a positive note and went on to hit a high of 39,306.37 during the session, but as investors took this opportunity to book profits, the gauge slipped and ended with a meagre gain of 7.11 points, or 0.02 per cent, at 39,097.14.
On the other hand, the 50-share NSE Nifty settled 12 points, or 0.10 per cent, lower at 11,588.20.
On the Sensex chart, major laggards were SBI, Axis Bank, L&T, Hero MotoCorp, Asian Paints, ONGC, Tata Steel and Bajaj Finance — dropping up to 3.56 per cent.
Among the top gainers were Infosys, RIL, TechM, Tata Motors, Maruti, PowerGrid, HCL Tech, TCS and Yes Bank — rising up to 3.78 per cent.
In the past two days, the Sensex zoomed 2,996.56 points, or 8.30 per cent; while the 50-share Nifty soared 895.40 points or 8.36 per cent.
Finance minister Nirmala Sitharaman on Friday announced a 10 percentage points reduction in the effective corporate tax rates, which triggered a two-day rally in equity markets.
Sectorally, BSE IT, teck, energy, FMCG, healthcare and power indices ended up to 2.31 per cent higher.
While BSE capital goods, metal, bankex, realty, finance and industrials indices settled up to 1.80 per cent lower.
Broader BSE midcap index closed 0.51 per cent lower while the BSE smallcap index advanced 0.17 per cent.
“After a massive rally investors took some money out which led the indices to trade range-bound. Sentiment factor is largely positive after the stimulus measures to attract allocation of more funds to mid and small caps. Bond yield inched higher despite the finance minister’s comment on retaining fiscal target of 3.3 per cent for FY20 and no reduction in spending. While governments’ second half borrowing plan will be keenly watched to get a clearer view on direction,” Vinod Nair, Head of Research, Geojit Financial Services, said.
Meanwhile, the rupee was quoted 7 paise lower at 71.01 against the US dollar in intra-day trade on Tuesday.
Brent crude futures fell 0.79 per cent to USD 63.77 per barrel (intra-day).
Stock exchanges in Europe were trading in the green in their respective early sessions.
In Asian stock markets, Hang Seng, Shanghai Composite Index, Nikkei and Kospi ended on a positive note.
Asian markets rose but dealers remain on edge following contrasting economic data out of Europe and the US as investors await developments in the China-US trade standoff.
Investor focus still remained on whether the US and China can find a solution to their long-running tariffs spat.
Optimism over the issue took a jolt at the weekend when Donald Trump said he did not want to make a piecemeal deal and instead was determined to sign a complete agreement.