Sensex, Nifty fall as financials drag, seen rangebound till polls
Analysts feel that unless there is an extraordinary development in the coming months, markets will remain volatile till the general elections.business Updated: Feb 04, 2019 14:09 IST
Shares fell on Monday as investors booked profits, including in Infosys Ltd and Larsen & Toubro Ltd, after the government announced its final budget before general elections due by May, while sentiment remained tepid ahead of a central bank policy meet later in the week.
Prime Minister Narendra Modi’s government on Friday pledged 750 billion rupees ($10.47 billion) to support poor farmers and reduced the tax burden for the middle class, as his Bharatiya Janata Party (BJP) braces for a tough general elections in the summer.
The Reserve Bank of India (RBI) will meet on Thursday to assess broader macro indicators and decide on interest rates. Over two-thirds of the 65 economists polled by Reuters said the RBI would hold its repo rate at 6.50 percent, pointing to an extraordinary U-turn in policy.
Analysts feel that unless there is an extraordinary development in the coming months, markets will remain volatile till the general elections.
“I expect markets to remain rangebound between 10,500-11,100 till the elections, but we will get a clearer picture of the market’s direction by Feb 15, when most of the corporate earnings will be done,” said Madhumita Ghosh, head corporate solutions, Tasmac Global Education.
“The markets have been at highs so some sort of correction is always welcome.”
The broader Nifty was down 0.50 percent at 10,839.25 as of 0620 GMT, while the benchmark BSE Sensex was 0.49 percent lower at 36,291.87.
Shares of Infosys and L&T fell 0.8 percent each. L&T gained 3.6 percent in the past three sessions, while Infosys climbed 4.3 percent in the last two trading days.
Financials dragged the indexes lower, with shares ICICI Bank Ltd falling 1.4 percent while those of Indusind Bank shed 2.8 percent.
Shares of Reliance Communications Ltd plunged over 54 percent to their record low after the company said it would seek a fast-track resolution through the bankruptcy court National Company Law Tribunal to resolve its indebtedness.
Troubled home finance company Dewan Housing Finance Corp Ltd’s stock fell to over five-year lows on claims of financial mismanagement and broader sectoral woes.
Less than a fifth of the stocks listed on the NSE index were in the green, with Titan Company Ltd jumping over 5 percent on strong quarterly results while index heavyweight Reliance Industries Ltd climbed up 0.8 percent.
First Published: Feb 04, 2019 14:08 IST