Heavyweight profit booking drags Nifty and Sensex down

Profit booking in the heavyweights dragged benchmarks down on Tuesday, although the broader market did reasonably well with BSE Midcap and SmallCap up 1.3% each. Tighter oil prices and concerns over an aggressive rate hike by the Federal Reserve, in the face of an inverted 2-year and 10-year U.S. Treasury yield curve, also weighed on sentiment. investors. The Sensex and Nifty were the worst performing benchmarks in the Asian region on Tuesday.

The HDFC twins, which jumped about 10% in yesterday’s trading, fell 2% to 3% on Tuesday, contributing 282 points to the Sensex’s fall. The largest company by market capitalization – Reliance Industries – added another 115 points to the index decline. The Sensex had jumped 2,043 points or 3.5% in two sessions through Monday. The yield on the benchmark US 10-year index rose 8 basis points (bps) to 2.48% on Tuesday.

While the Sensex slipped 435.24 points or 0.72% to end the session at 60,176.50 points, the broader Nifty ended on a negative note and crucially, below the psychological mark of 18,000. The Nifty50 closed down 0.53% at 17,957.40 points. For Nifty, support is now seen at its 200 DMA level of 17,100 with intraday support at 17683. fell about 2-3%.Investors also weighed hawkish expectations for the Fed as the two-year and 10-year U.S. Treasury yield curves inverted. until the Fed announces 50 basis point rate hikes at meetings in May, June and July,” said Prashanth Tapse, vice president (research) at Mehta Equities.

Meanwhile, the rupiah continued to gain in trade, having appreciated 1.4% against the greenback over the past seven sessions. The local currency gained 22 paise to end the session at 75.33 against the US dollar. “Sales to exporters and lumpy companies have been the main drivers of the rupee’s appreciation. With stable oil prices, the rupee is also seeing inflows of REITs,” observed Anindya Banerjee, VP, Derivatives at currencies and interest rates at Kotak Securities Banerjee expects a range of 75.00 and 75.80 on the spot, in the short term.

Foreign and local institutional investors bought shares on Tuesday. While REITs acquired $49.76 million worth of stocks, domestic institutional investors bought $13.99 million, according to preliminary exchange data. Of the 3,507 stocks traded on BSE, 2,306 scrips ended the day in the green with 15 of 19 sector indices gaining in trade. BSE power and utilities jumped the most on Tuesday with gains of 3.3% each.