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Profit booking, US unrest subdues market, IT stocks down
Mumbai, January 7, 2021
Profit booking, along with global cues such as the US unrest, pulled the Indian equity benchmark indices to close at a flat-to-negative note on Thursday.
The two main Indian indices opened on a positive note but failed to sustain at higher levels.
Subsequently, volatility surged as investors dived into the market to buy declining stocks.
The FIIs bought more than Rs 382 crore worth of equities on Thursday which was lower than their recent average purchases of Rs 1,500 crore per session.
Globally, Asian stock markets mostly rose, as investors anticipated higher government spending under a Democratic party-controlled US Senate and largely looked past political violence in Washington, D.C.
Even the European stock markets edged largely higher on Thursday.
On the domestic front, sector-specific action was witnessed with real estate stocks in focus after Sobha announced strong Q3 volumes and Maharashtra government slashed premiums and levies charged on construction by 50 per cent till December 31.
Among sectors, metals, realty and PSU banks gained the most, while FMCG, IT and pharma fell the most.
The S&P BSE Sensex closed at 48,093.32 points, lower by 80.74 points, or 0.17 per cent, from its previous close.
The NSE Nifty50 closed at 14,137.35 points, lower by 8.90 points, or 0.06 per cent, from its previous close.
"Markets may be witnessing some distribution at higher levels as is evident from large volumes in the past two days," said Deepak Jasani, Head of Retail Research at HDFC Securities.
"However, as long as the 13,985 level on the Nifty is not breached, this remains a buy-on-dips market."
Siddhartha Khemka, Head, Retail Research, Motilal Oswal Financial Services, said: "Going ahead, the global cues will be watched closely for the further trend in the market. The December quarterly results will kick start with TCS announcing its Q3 numbers on January 8 while the Union Government will present the much anticipated Budget on February 1."
"As the long term market structure remains positive, we would advise investors to adopt 'Buying on Dips' strategy to accumulate quality stocks."
Vinod Nair, Head of Research at Geojit Financial Services said: "Although the markets witnessed a range bound rally during the day, profit booking was seen towards the end of the session. Outperformance was seen in small and mid-cap stocks today. Realty stocks experienced upward momentum after Maharashtra cut levies on real estate projects by 50 per cent while a downward trend was seen in IT and FMCG stocks owing to profit booking."
"The global markets were largely positive on potential democratic control of the US Senate and increasing prospects for further economic US stimulus measures. Healthy business figures reported by banking and auto companies have led to a better quarterly outlook and are expected to keep the sector in focus in the coming days."