Profit-taking in IT stocks, weak global cues bridle galloping stock markets

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.

The index opened lower but staged a recovery in late-morning deals to touch its all-time intra-day high of 73,427.59. The barometer therafter failed to hold onto gains 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.

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.

Among the Sensex firms, Wipro, HCL Technologies, NTPC, Reliance Industries, Infosys, IndusInd Bank, Tech Mahindra and Tata Consultancy Services were the major laggards.

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.

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 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 and small caps.

"FII flows are mixed due to a lack of fresh triggers. Oil prices stayed firm amid undeterred geopolitical tensions," said Vinod Nair, Head of Research, Geojit Financial Services.

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. During the day, it zoomed 833.71 points or 1.14 per cent to reach its all-time peak of 73,402.16. The Nifty climbed 202.90 points or 0.93 per cent to settle at a new closing high of 22,097.45. During the day, it surged 221 points or 1 per cent to reach a lifetime intra-day high of 22,115.55.

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.

Rupee loses ground against $

The rupee slumped 23 paise to 83.09 (provisional) against the US dollar on Tuesday, as a strong greenback against major rivals overseas and negative equity market dented investor sentiment.

Besides, volatile crude oil prices in the international markets weighed on the domestic currency, forex traders said.

At the interbank foreign exchange, the domestic currency opened at 82.95 and traded in the range of 82.92 to 83.09 against the greenback during intra-day.

The unit finally settled at 83.09 (provisional) against the dollar, registering a loss of 23 paise from its previous close.

On Monday, the rupee settled with a gain of 9 paise at 82.86 against the US dollar. This was the ninth consecutive day of gain for the Indian currency.

Anuj Choudhary, Research Analyst at Sharekhan by BNP Paribas, said the rupee depreciated on the strong dollar and weak domestic markets. "A rise in crude oil prices also put downside pressure on the rupee. However, favourable macroeconomic data prevented a sharp fall in the rupee."

Meanwhile, the US dollar gained on safe-haven demands amid concern over disruption in global trade through the Red Sea route.

Choudhary said the rupee is expected to "trade with a slight negative bias on risk aversion in the global markets amid escalating geopolitical tensions in the Middle East.

"USD-INR spot price is expected to trade in a range of Rs 82.60 to Rs 83.40."

The dollar index, which gauges the greenback's strength against a basket of six currencies, was trading 0.78 per cent higher at 102.95 on Tuesday.

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

Gold, Silver down

Gold prices slipped Rs 100 to Rs 63,450 per 10 grams in the national capital on Tuesday amid weak global cues, according to HDFC Securities.

The precious metal had ended at Rs 63,550 per 10 grams in the previous trade.

Silver also declined Rs 300 to Rs 76,400 per kilogram.

Snapping the two-day winning streak, spot gold prices in the Delhi markets are trading at Rs 63,450/10 grams, down by Rs 100, Saumil Gandhi, Senior Analyst of Commodities at HDFC Securities, said.

In the overseas markets, gold and silver were trading lower at $2,049 per ounce and $23.06 per ounce, respectively.

Following a recovery in the dollar and US Treasury yields, gold prices declined on Tuesday, Gandhi said.

OIl gains

Crude oil prices on Tuesday increased Rs 29 to Rs 6,037 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 29, or 0.48 per cent, at Rs 6,037 per barrel in 16,377 lots.

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

Globally, West Texas Intermediate crude oil was down by 0.21 per cent to USD 72.53 per barrel, and Global oil benchmark Brent crude climbed 0.68 per cent to USD 78.68 a barrel.