Benchmark indices Sensex and Nifty declined in early trade on Monday, with Sensex dropping 370 points and Nifty hitting a one-month low. Heavy selling in Kotak Mahindra Bank, weak Asian cues, and India-US trade deal uncertainty hurt investor sentiment. FII outflows and a slump in IT stocks, especially TCS, added to the market weakness.
Representational Image. File Pic
Benchmark equity indices Sensex and Nifty declined in early deals on Monday dragged down by heavy selling pressure in Kotak Mahindra Bank and uncertainty related to the India-US trade deal. Persistent foreign fund outflows and weak trends in Asian markets also hit investors' sentiment.
The 30-share BSE Sensex dropped 369.58 points to 81,093.51 in early trade. The 50-share NSE Nifty declined 104.3 points to 24,732.70. From the Sensex firms, Kotak Mahindra Bank tumbled nearly 7 per cent after the company on Saturday reported a consolidated net profit of Rs 4,472 crore for the June quarter, and flagged stress on the retail commercial vehicle portfolio due to adverse macroeconomic conditions.
The profit in the year-ago period was Rs 7,448 crore, but it had included gains of over Rs 3,000 crore on its stake sale in the general insurance arm, while the net profit for the March quarter stood at Rs 4,933 crore. Tata Consultancy Services, Bharti Airtel, Infosys and Eternal were also among the laggards.
However, Tata Motors, Bajaj Finserv, UltraTech Cement and Power Grid were among the gainers. "Negative news and triggers have pushed the Nifty to a one-month low, and market sentiments continue to be unfavourable. While trade deals with Japan and EU, thought to be difficult initially, have happened, the much expected India-US trade deal is even now hanging fire. This has impacted market sentiments," VK Vijayakumar, Chief Investment Strategist, Geojit Investments Limited, said.
Vijayakumar further added that the sharp cut in the IT index has been dragging the market down, and there is no respite in this in view of the 2 per cent cut in its global workforce announced by TCS.
FII selling of Rs 13,552 crore in the cash market last week has added to the weakness in the market, he said. In Asian markets, South Korea's Kospi, Japan's Nikkei 225 index and Shanghai's SSE Composite index traded lower while Hong Kong's Hang Seng quoted in positive territory.
The US markets ended higher on Friday
Foreign Institutional Investors (FIIs) offloaded equities worth Rs 1,979.96 crore on Friday, according to exchange data. Global oil benchmark Brent crude climbed 0.29 per cent to USD 68.64 a barrel.
On Friday, the Sensex tanked 721.08 points or 0.88 per cent to settle at over a month's low of 81,463.09. The Nifty dropped 225.10 points or 0.90 per cent to a month's low of 24,837.
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