Markets moving into a consolidation phase

Sensex, Nifty fall 213 points and 93 points, respectively

FPJ News Service mumbai

Indices Sensex and Nifty fell for the second consecutive day on Thursday amid caution ahead of the RBI’s monetary policy decision, profit-taking and fresh foreign fund outflows.  The 30-share BSE Sensex dropped 213.12 points or 0.27 per cent to settle at 78,058.16. During the day, it tumbled 427.29 points or 0.54 per cent to 77,843.99. The NSE Nifty declined 92.95 points or 0.39 per cent to 23,603.35 with 30 of its constituents closing lower. 

“The market is moving into a consolidation phase on expectations of a pick up in growth in the coming quarters. In the near-term the market is likely to get a mild boost from a possible 25 bps rate cut by the MPC on Friday. Even though steadily depreciating rupee does not provide a favourable macro backdrop for a rate cut, the MPC is likely to go for a 25-basis point cut to keep the optimistic momentum provided by the Budget going. 

“The macro trend in the US is turning favourable for emerging markets, including India. The dollar index slipping to 107.56 and the 10-year yield declining to 4.4% are positives. FIIs are unlikely to press selling the way they did in January. Financials will be in focus on rate cut expectations,” said Dr. V K Vijayakumar, chief investment strategist at Geojit Financial Services. 

“The benchmark indices experienced a moderate decline as investors awaited the RBI's decision on a potential rate cut amidst the ongoing trade war. The broader market remained cautious, in a consolidation phase, despite the government's focus on boosting consumption to cushion lower growth. Meanwhile, the IT and Pharma sectors advanced supported by lower treasury yields after moderating US PMI data, encouraging the Fed to reduce interest rates,” Vinod Nair, Head of Research, Geojit Financial Services.

Among Sensex scrips, Bharti Airtel, Titan, NTPC, State Bank of India, ITC, Tata Steel, Mahindra & Mahindra and Tata Motors were the major laggards. Adani Ports, Infosys, Axis Bank, HCL Technologies, Tech Mahindra and IndusInd Bank were among the top gainers.