Stock markets pare early gains in afternoon session; Sensex ends 63 points low, NSE dips; Bharti Airtel, IT stocks fall

The stock market paired its early gains in the afternoon session despite positive global markets as traders used the rally to book profit. While the market made a gap-up opening tracking firm trade in Asian markets, sharp selling emerged in IT, pharma and select stocks such as Bharti Airtel, Bajaj Finance in the afternoon session weighed on bourses. Cement stocks witnessed sharp buying in today’s session amid optimism of continued rise in the cement prices across India. Shares gave up early gains to end slightly lower on Tuesday, led by a fall in Bharti Airtel and information technology shares amid concerns over a sharp rise in domestic coronavirus cases.

#MarketAtClose | Market fails to hold opening gains; Sensex & Nifty close lower as Sensex slips 477 points & Nifty 133 points from highs pic.twitter.com/bubINQSXeb

— CNBC-TV18 (@CNBCTV18Live) May 26, 2020

ITC was up by 5 percent after announcing that it will fully acquire spices manufacturer Sunrise Foods Private Ltd (SFPL). Meanwhile, gains in banking, FMCG and auto indices was offset by selling in IT and pharma sectors which led the market to end on a flat note. Broader indices, however, outperformed major benchmarks by a wide margin. Investors are likely to remain cautious on the development related to COVID-19 cases in the country and impact of lockdown on the economy.

Sensex gave up all the day’s gains to end 63 points lower on Tuesday as spiking number of COVID-19 cases in the country created an uncertainty about lockdown measures going ahead. After rallying 414.11 points during the day, the 30-share index declined 63.29 points or 0.21 per cent to 30,609.30.

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Similarly, NSE Nifty ended 10.20 points or 0.11 percent down at 9,029.05. Sumeet Bagadia, Executive Director, Choice Broking told Firstpost, “The Index settled its closing at 9,029 level with the minor loss of 10 points; however in contrast, the BankNifty gave a closing at 17440 with the gain of 160 points. We got a good opening on back of Asian markets and few large cap private Banks, however, the Index couldn’t sustain its early gains and started to fall during the middle of the first session and filled the gap which it formed while giving an opening. The way the Index gave a downside movement during the trading session, it seems that we might see a further downside movement in upcoming trading sessions. At present levels, the Index has strong support at 8,950-,8800 while upside resistance comes at 9,350-level,” Bagadia said. On the other hand, Titan, Ultratech Cement, IndusInd Bank, Nestle India and ITC were among the gainers. Manish Hathiramani, Index Trader and Technical Analyst, Deen Dayal Investments, said to Firstpost, “The markets ended on a sideways note once again - it was neither successful in crossing 9175, nor did it break 8950. With expiry just around the corner, the trading range has become narrow which is making it difficult for traders to take a position in a particular direction.” Tata Consultancy Services fell 3.8 percent, Infosys Ltd 1.7 percent, and Bharti Airtel 5.7 percent. The stocks were top laggards in the bluechip Nifty-50 index. Nagaraj Shetti, Technical Research Analyst, HDFC Securities told Firstpost, “After showing range movement on Friday, Nifty continued to show lackluster type movement today and closed the day on a slightly negative note. A small negative candle was formed that placed beside the similar type of candle of Friday’s session. This action indicates a range movement in the last three sessions, after a sharp upside bounce of 20 May. Currently, Nifty is placed at the key overhead resistance of 9150-9180 levels in the last few sessions and we observe an emergence of intraday weakness from near the resistance. On the daily chart we notice a formation of consistent lower highs within a larger range bound movement. Currently, Nifty making an attempt to form another lower high formation above 9150 levels. “The formation of hammer type candle pattern on the weekly chart signal that any minor weakness from here could be a buying opportunity in the short term. Immediate supports to be watched at 8950. A sustainable move above 9,150-9,180 is likely to lift Nifty towards 9500 levels in the short span of time,” he said. The number of coronavirus cases in India climbed to 1,45,380 and the death toll touched 4,167, as per health ministry data. Rupee settles 29 paise higher at 75.66 against dollar The rupee appreciated 29 paise to close at 75.66 against the US dollar on Tuesday tracking weakness in the American currency, while easing of COVID-19 lockdown measures fuelled growth optimism. At the interbank foreign exchange, the rupee opened at 75.69, then gained ground and finally settled for the day at 75.66, registering a rise of 29 paise over its previous close. On Friday, rupee had settled at 75.95 against the US dollar. Forex market was closed on Monday for Id-Ul-Fitr. During the trading session, the rupee witnessed an intra-day high of 75.62 and a low of 75.74. Forex traders said weakness of the US dollar against other currencies overseas and easing of lockdown restriction across the world boosted investor sentiment and supported the local unit. The dollar index, which gauges the greenback’’s strength against a basket of six currencies, was trading 0.44 percent down at 99.42.