Market benchmarks Sensex and Nifty on Wednesday closed in the red, pausing their four-session winning run on emergence of selling mainly in banking stocks. After trading on a volatile note through the day, the 30-share BSE Sensex settled 79.90 points or 0.19 per cent lower at 41,872.73.
Similarly, the broader Nifty closed 19 points, or 0.15 per cent, down at 12,343.30. Both indices—Sensex and Nifty—had closed at their life-time high levels for the second day in a row on Tuesday. IndusInd Bank was the top loser in the Sensex pack, dropping 5.44 per cent. Infosys, SBI, PowerGrid, Tech Mahindra, Bharti Airtel and HDFC Bank too fell up to 1.21 per cent.
On the other hand, Hero MotoCorp, Titan, Maruti, Asian Paints, M&M, TCS, Bajaj Auto and Ultratech Cement rose up to 2.58 per cent. Analysts are of the view that indices retreated from record highs after US officials said the trade truce with China, set to be signed on Wednesday, does not include a deal to roll back tariffs imposed on most Chinese goods.
Vinod Nair, Head of Research, Geojit Financial Services Ltd, said, “After the solid pre-budget rally, market is getting a bit sceptical post higher than expected NPA numbers in the recent Q3 banks results and very high consumer inflation which may stay for another month or two. Market would watch the Q3 results & actual budget, for further direction.”
In the previous session, Sensex settled 92.94 points or 0.22 per cent higher at 41,952.63 - its all-time closing high. Likewise, Nifty ended 32.75 points, or 0.27 per cent, higher at 12,362.30, which was a record closing level.
Meanwhile, on a net basis, foreign institutional investors sold equities worth Rs 205.56 crore, and domestic institutional investors offloaded shares worth Rs 642.47 crore on Tuesday, data available with stock exchanges showed. Bourses in Shanghai, Hong Kong, Tokyo and Seoul ended on a negative note, while exchanges in Europe were off to a tepid start.
Domestic investors were also concerned about possible stagflation in India due to low growth and high inflation in wake of recently released government data, traders said. Brent crude oil futures fell 0.33 per cent to USD 64.28 per barrel. The rupee was trading flat at 70.87 per US dollar (intra-day).
Gold prices rallied Rs 256 to Rs 40,441 per 10 gram in the national capital on Wednesday, led by strong buying in global markets, according to HDFC Securities.
On Tuesday, the yellow metal had closed at Rs 40,185 per 10 gram. “Spot gold for 24 Karat in Delhi rose by Rs 256 on strong buying in global gold prices amid US-China trade deal concerns,” HDFC Securities Senior Analyst (Commodities) Tapan Patel said.
In a statement on Tuesday, US officials said that the trade deal with China set to be signed on Wednesday does not include a deal to roll back tariffs imposed on most Chinese goods.
Silver also witnessed increase in buying with prices rising by Rs 228 to Rs 47,272 per kg from Rs 47,044 per kg. Meanwhile, the Indian rupee opened on a cautious note in early trade on Wednesday and fell 14 paise to 71.01 against the US dollar as concerns over the US-China trade deal weighed on investor sentiments.
In the international market, both gold and silver were trading with gains at USD 1,552 per ounce and USD 17.83 per ounce, respectively.