Stock markets end 5-day winning run on profit-taking in IT stocks weak global cues

Mumbai: Stock markets snapped their five-day winning run on Tuesday with the benchmark Sensex declining by 199 points due to profit-taking in IT and oil shares and weak global trends.

The 30-share BSE Sensex dropped by 199.17 points or 0.27 per cent to settle at 73,128.77. As many as 20 Sensex shares declined while 10 advanced.

The key index opened lower but staged a recovery in late-morning deals to touch its all-time intra-day high of 73,427.59. But the barometer failed to hold onto gains in the second half due to profit-taking in the broader market and retreated by 367.65 points or 0.50 per cent to a low of 72,960.29.

The Nifty touched its all-time intra-day high of 22,124.15 before closing lower by 65.15 points or 0.29 per cent at 22,032.30. As many as 33 Nifty shares closed in the red while 17 advanced.

In the last five days, the BSE benchmark rallied 1,972.72 points or 2.76 per cent, and the Nifty jumped 584.45 points or 2.71 per cent. Both Sensex and Nifty closed at record high levels on Monday.

“The broad market exhibited profit-booking following a good performance by the IT sector amid weak global cues. Investors are contemplating whether the current euphoria in markets has gone farfetched, especially with elevated domestic valuations in mid & small caps,” said Vinod Nair, Head of Research, Geojit Financial Services.

“FII flows are mixed due to a lack of fresh triggers. Oil prices stayed firm amid undeterred geopolitical tensions,” he added.

Among the Sensex firms, HCL Tech fell the most by 2.05 per cent. Wipro dropped by 1.93 per cent, NTPC by 1.84 per cent, Reliance Industries by 1.43 per cent, Infosys by 1.27 per cent, Tech Mahindra by 1.17 per cent and TCS by 1.06 per cent. IndusInd Bank, Sun Pharma, M&M, Power Grid, Bharti Airtel, and SBI were also among the losers.

IT stocks fell on profit-taking after rallying sharply in the past two sessions.

Tata Steel, Titan, Maruti, Larsen & Toubro, ITC and JSW Steel were among the gainers.

HDFC Bank gained 0.42 per cent ahead of its financial results which were announced after market hours. The largest private sector lender reported a 34 per cent jump in its standalone net profit to Rs 16,373 crore for the October-December period of 2023-24.

“The profit taking in the IT, realty and energy majors were weighing on the sentiment while metal and FMCG showed resilience. The broader indices too inched lower and lost nearly half a percent each,” Ajit Mishra, SVP – Technical Research, Religare Broking Ltd said.

Kunal Shah, Senior Technical & Derivative Analyst, LKP Securities, said that the Nifty index experienced a day of mixed market dynamics, with bulls dominating the first half and bears taking control in the second half.

For a sustained upward movement towards 22,300 levels, the index needs to decisively break above the 22,150 mark. On the downside, the immediate support is located at 21,950, Shah said.

In Asian markets, Seoul, Tokyo and Hong Kong settled lower while Shanghai ended in the positive territory.

European markets were trading lower. The US markets were closed on Monday on account of Martin Luther King, Jr. Day.

The BSE benchmark jumped 759.49 points or 1.05 per cent to settle at a new closing high of 73,327.94 on Monday. The Nifty climbed 202.90 points or 0.93 per cent to settle at a new closing high of 22,097.45.

Global oil benchmark Brent crude climbed 0.68 per cent to USD 78.68 a barrel.

Foreign Institutional Investors (FIIs) bought equities worth Rs 1,085.72 crore on Monday, according to exchange data.