Sensex drops 33 points in early trade, Nifty low; IT, auto stocks take a beating amid fresh infusion of funds

Equity indices languished in the negative terrain during early hours on Tuesday as investors awaited the outcome of new European Central Bank (ECB) boss Christine Lagarde's first policy meeting later this week. At 10:15 am, the BSE S&P Sensex was down by 11 points to 40,476 while the Nifty 50 edged lower by 6 points at 11,931. Most sectoral indices at the National Stock Exchange were in the red with Nifty IT down by 0.9 per cent.

The BSE Sensex on Tuesday slipped over 33 points in early trade, due to losses in select private banks, IT and auto stocks amid fresh infusion of funds by foreign investors.

The 30-share index was trading 33.67 points or 0.08 percent lower at 40,453.76 in morning trade. The broader Nifty was trading 11.00 points or 0.09 percent down at 11,926.50.

Top losers in the Sensex pack in early trade included Yes Bank, TCS, Tech Mahindra, PowerGrid, Infosys, Axis Bank, ITC and IndusInd Bank, falling up to 2.22 percent.

On the other hand, Sun Pharma, Tata Motors, HUL, ONGC, HDFC, Bajaj Finance and SBI gained up to 1.76 percent.

Representational image. Reuters.

In the previous session, the Sensex settled with gains of 42.28 points or 0.10 percent at 40,487.43. The 50-scrip NSE Nifty closed 16 points or 0.13 percent higher at 11,937.50.

Foreign institutional investors (FIIs) emerged as net buyers in the capital market, infusing Rs 459.22 on Monday, while domestic institutional investors bought shares worth Rs 74.93 crore, data available with stock exchange showed.

Rupee appreciates

The rupee appreciated by 10 paise to 70.94 against the US dollar in early trade on Tuesday as easing crude prices and sustained foreign fund inflows strengthened investor sentiments.

At the interbank foreign exchange the rupee opened at 70.98, then gathered momentum and touched 70.94 against the US dollar, registering a rise of 10 paise over its previous close.

On Monday, rupee had settled for the day at 71.04 against the US dollar.

Forex traders said investors were optimistic about the US-China trade talks.

Domestic bourses opened on a cautious note on Tuesday with benchmark indices Sensex trading 60.61 points lower at 40,426.82 and Nifty down 15.45 points at 11,922.05.

The dollar index, which gauges the greenback's strength against a basket of six currencies, fell by 0.02 per cent to 97.62.

Market participants, said foreign fund inflows supported the local currency and took it past 71-level.

Foreign institutional investors (FIIs) remained net buyers in the capital market, as they purchased shares worth Rs 459.22 crore on Monday, according to provisional exchange data.

Asian markets edge low

Asian equity markets were a tad lower on Tuesday as investors refrained from making major bets before 15 December when the next round of US tariffs on Chinese imports is due to take effect, Reuters said.

A Chinese Commerce Ministry official said on Monday that Beijing hopes to make a trade deal with Washington as soon as possible before new US tariffs are due to kick in this weekend.

MSCI’s broadest index of Asia-Pacific shares outside Japan was down just 0.04 percent as the Asian trading day began on Tuesday.

Australian shares were also 0.04 percent lower, while Japan's Nikkei lost 0.23 percent.

“The decision whether or not to raise tariffs on 15 December rests with President Trump and he has continued his constructive ambiguity on the issue which is keeping markets guessing,” said Tapas Strickland, a director of economics and markets at National Australia Bank.

Tepid trade followed weakness on Wall Street overnight. The Dow Jones Industrial Average fell 0.38 percent to 27,909.6, the S&P 500 lost 0.32 percent to 3,135.96 and the Nasdaq Composite dropped 0.4 percent to 8,621.83.

Investors were also keeping an eye on the US Federal Reserve, which is expected to keep rates unchanged at its two-day policy meeting, which ends Wednesday.

With rates likely to stay put, analysts say investors will be closely watching policymakers’ forecasts for future U.S. economic growth.

On Tuesday, the US two-year yield, watched as a sign of market expectations of Fed fund rates, was at 1.6191 percent, down from its close of 1.627 percent on Monday.

--With inputs from agencies