Sensex pares opening losses to turn positive in early trade, Nifty low; Repo rate cut fails to enthuse markets
After starting over 250 points lower, the Sensex made a U-turn to rise over 70 points to 31,005.19.
Shares tracked world markets lower on Friday, led by metals and mining stocks, as new US-China tensions raised doubts about a trade deal between the world’s two largest economies.
Sensex pared opening losses to turn positive in early trade on Friday amid gains in index-heavyweights Reliance Industries, Infosys and SBI.
After starting over 250 points lower, the 30-share index made a U-turn to rise over 70 points to 31,005.19.
The index, turned choppy in the first hour of trade ahead of Reserve Bank of India''s press conference, scheduled for 1000 hours.
NSE Nifty was quoting 4.35 points or 0.05 percent lower at 9,101.90.
Reliance Industries Limited (RIL) on Friday announced that private equity firm KKR will invest Rs 11,367 crore in Jio Platforms for a 2.32 percent stake. This is the fifth big-ticket deal announced by the oil-retail-to-telecom conglomerate in the past month.
“This transaction values Jio Platforms at an equity value of Rs4.91 lakh crore and an enterprise value of Rs 5.16 lakh crore. This is KKR’s largest investment in Asia and will translate into a 2.32 percent equity stake in Jio Platforms on a fully diluted basis,” RIL said in a release on Friday.
The RBI governor held a press conference at 10 AM. He announced a cut in repo rate by 40 bps to 4 percent. However this failed to cheer the market as indices continued to stay in the red.
— CNBC-TV18 (@CNBCTV18Live) May 22, 2020
Sensex fell 125.05 points or 0.40 percent to 30,807.85 while the Nifty was down 35.35 points or 0.39 percent at 9,070.90 at around 10.10 AM.
Tata Steel, HCL Tech, PowerGrid, Axis Bank, HDFC and Bajaj Auto were the top losers in the Sensex pack.
The major gainers were Ultra Cement, Infosys, Asian Paints, Tech Mahindra and SBI.
#CNBCTV18Market | Indices hovering around flatline after opening lower; Street awaiting outcome of the @RBI governor's address. STAY TUNED for LIVE coverage & detailed analysis of the announcement #RBIActs pic.twitter.com/ze9xxA31ip — CNBC-TV18 (@CNBCTV18Live) May 22, 2020
Manish Hathiramani, Index trader and technical analyst, Deen Dayal Investments, said, "The markets are consolidating around its support range of 9020 - 9050. If it can sustain at these levels, it would attempt to reach 9200. However, if it fails to hold 9020/9030, it can slide to 8930. For now, the bias is toward the upside.
Buying in Reliance Industries offset the negative sentiment in the market as the scrip jumped over 1 per cent after the company announced the sale of a 2.32 per cent stake in its digital unit to US private equity giant KKR for Rs 11,367 crore.
This the fifth deal in four weeks that will inject a combined Rs 78,562 crore in the oil-to-telecom conglomerate to help it pare debt.
UltraTech Cement, SBI, Infosys, Tech Mahindra were among the other gainers.
On the other hand, Tata Steel, HCL Tech, PowerGrid and NTPC were among the laggards.
In the previous session, the BSE barometer settled 114.29 points or 0.37 per cent up at 30,932.90, while the broader Nifty advanced 39.70 points, or 0.44 per cent, to 9,106.25.
Foreign portfolio investors offloaded equities worth Rs 258.73 crore in the capital market on Thursday, provisional exchange data showed.
Besides stock-specific action, investors are cautious ahead of Reserve Bank of India''s announcement, traders said.
Further, weak cues from global markets and spiking COVID-19 cases in the country hit investor sentiment, they added.
India witnessed the biggest single-day spike with 6,088 COVID-19 cases, taking the tally to 1.18 lakh. The death toll rose to 3,583, according to the health ministry.
Globally, the number of cases linked to the disease has crossed 51 lakh and the death toll has topped 3.32 lakh.
Bourses in Shanghai, Hong Kong, Tokyo and Seoul were trading significantly lower.
Hong Kong led a sell-off across Asian equities after China introduced proposals to enact a national security law for the city.
Stock exchanges on Wall Street ended with losses in overnight session.
International oil benchmark Brent crude futures were trading 3.72 per cent lower at $34.72 per barrel.
Metal was the biggest drag while auto was the top gainer. BSE Midcap and Smallcap indices rose around 0.5 percent. Bank Nifty inched up 0.08 percent to 33,339.00
BSE Smallcap and Midcap indices suffered minor losses. India VIX slid to 21.89 levels. Realty, metal and healthcare were some of the sectors to end in green. Oil and gas was the biggest drag
BSE Midcap plunged over 2.7 percent, while BSE Smallcap crashed over 3 percent. India VIX surged 14.21 percent to 22.37 levels. IT was the worst performing sector