Equity markets go south as profit taking, foreign fund outflows continue, Sensex falls 379 points, Nifty sheds 76 points

Benchmark Sensex declined by 379 points on Tuesday due to profit-taking in bank and IT shares after recent sharp gains and fresh foreign fund outflows.

The 30-share BSE Sensex fell by 379.46 points or 0.53 per cent to settle at 71,892.48. During the day, it tumbled 658.2 points or 0.91 per cent to a low of 71,613.74.

The broader Nifty declined by 76.10 points or 0.35 per cent to close at 21,665.80. As many as 31 Nifty shares declined while 19 advanced.

Among the Sensex firms, Kotak Mahindra Bank, UltraTech Cement, Mahindra & Mahindra, Larsen & Toubro, ICICI Bank, IndusInd Bank, Wipro and Hindustan Unilever were the major laggards.

Sun Pharma, Bajaj Finance, Bharti Airtel, Reliance Industries, Bajaj Finserv and Titan were among the winners.

The market extended yesterday’s last hour’s sell-off, taking negative cues from Asian peers due to weak Chinese manufacturing data and mounting tensions in the Red Sea, which has the potential to disrupt global trade and crude supplies," Vinod Nair, Head of Research at Geojit Financial Services said.

"Ahead of the impending results season, investors are adopting a profit booking strategy. Auto stocks declined on below-expected volume numbers, while pharma stocks were the standout due to catch-up in the US economy," Nair added.

In Asian markets, Shanghai and Hong Kong settled lower while Seoul ended in the green. European markets were mostly trading in positive territory.

Asian, European and US markets were closed on Monday for the New Year.

Global oil benchmark Brent crude jumped 2.05 per cent to $78.58 a barrel.

Foreign institutional investors (FIIs) offloaded equities worth Rs 855.80 crore on Monday, according to exchange data.

The BSE gauge eked out a modest gain of 31.68 points or 0.04 per cent to settle at 72,271.94 after a muted beginning on Monday. The Nifty went up by 10.50 points or 0.05 per cent to 21,741.90.

In 2023, the BSE benchmark jumped 11,399.52 points or 18.73 per cent, and the Nifty climbed 3,626.1 points or 20 per cent.

Gold adds Rs. 280

Gold prices jumped Rs 280 to Rs 64,200 per 10 grams in the national capital on Tuesday amid strong global cues and depreciation in rupee, according to HDFC Securities.

In the previous close, the precious metal had closed at Rs 63,920 per 10 grams, while silver rose Rs 300 to Rs 78,800 per kilogram.

"The domestic gold prices traded higher following weaker rupee and stronger international gold prices," Dilip Parmar, research analyst at HDFC Securities, said.

In the futures trade, February contract of gold advanced Rs 208 to Rs 63,528 per 10 grams on the MCX. Also, March contract of silver rallied Rs 405 to Rs 74,795 per kilogram on the bourse.

In the overseas markets, gold and silver were quoting higher at $ 2,073 per ounce and $ 24 per ounce, respectively.

Rupee loses more ground against $

The rupee depreciated by 11 paise to 83.32 (provisional) against the US dollar on Tuesday, amid a muted trend in domestic equities and dollar demand from importers.

Forex traders said foreign fund outflows and dollar demand from importers weighed on investor sentiments.

At the interbank foreign exchange market, the local unit opened at 83.28 and finally settled at 83.32 (provisional) against the dollar, down by 11 paise from its previous close.

On Monday, the rupee depreciated by 5 paise to 83.21 against the US dollar, in the first trading session of the year 2024.

The dollar index, which gauges the greenback's strength against a basket of six currencies, was 0.11 per cent up at 101.44 on Tuesday.

Brent crude futures, the global oil benchmark, was trading higher by 2.13 per cent to $ 78.68 per barrel.

US dollar rose on safe haven appeal amid geopolitical tensions in the Red Sea and the ongoing conflict in the Middle East, according to Anuj Choudhary, Research Analyst, Sharekhan by BNP Paribas.

"We expect the rupee to trade with a negative bias on weak domestic equities and a rise in the US dollar. Surge in crude oil prices may also weigh on the domestic currency. However, any FII outflows may support rupee at lower levels," Choudhary added.

Choudhary further noted that traders may take cues from final manufacturing PMI and construction spending data from the US. "Traders may await manufacturing index data from India and ISM manufacturing PMI and JOLTS jobs data from the US tomorrow. USD-INR spot price is expected to trade in a range of 83.10 to 83.70," he added.

On the domestic macroeconomic front, GST collections rose 10 per cent to about Rs 1.64 lakh crore in December compared to Rs 1.49 lakh crore in the same month a year ago.

During April-December 2023, gross Goods and Services Tax (GST) collection witnessed a robust 12 per cent growth, reaching Rs 14.97 lakh crore against Rs 13.40 lakh crore mopped up in the same period of the previous year, the finance ministry said in a statement on Monday.

Brent jumps 2 %

Crude oil prices on Tuesday increased Rs 33 to Rs 6,060 per barrel in futures trade as participants widened their positions following a firm spot demand.

On the Multi Commodity Exchange, crude oil for January delivery traded higher by Rs 33, or 0.55 per cent, at Rs 6,060 per barrel in 14,358 lots.

Analysts said raising of bets by participants kept crude oil prices higher in futures trade.

Globally, West Texas Intermediate crude oil was up by 1.21 per cent to $ 72.52 per barrel, and Global oil benchmark Brent crude jumped 2.05 per cent to $78.58 a barrel.