Markets snap 5-day winning streak, profit-booking drags Sensex below 21,000

3.42 pm: Sensex closes below 21,000

Bouyed down by heavy profit booking,the Indian markets closed in the red today. The BSE Sensex closed at 20951, down 287 pts, Nifty closed at 6245 down 71 pts.

The BSE Sensex fell below 21,000, snapping a five-day winning streak.

Fall in the index was led by defensive sectors like IT, pharma and FMGC which had risen during the 5-day rally.

Bharti Airtel stocks were down 1.56 percent even as the company signed agreement to acquire Warid’s Congo Brazzaville operations.

9:45 amSensex is now down over 200 points, with 27 components in the red on heavy profit booking by investors. Even the Nifty is trading below 6300.

At 9:45 am, Sensex was down168 points at 21070, while Nifty was down 50 points at 6267.

Technology and banking stocks are under selling pressure. HDFC, ICICI Bank , SBI , Axis Bank and Bank of Baroda are big banking laggards. Wipro is down over 1 percent. Tata Powers, Sesa Sterlite, Tata Motors and GAIL are major losers in the Sensex.

Meanwhile, investment bank Goldman Sachs has upgraded its India rating to equal-weight from earlier underweight citing improving macro and micro cues. The investment banking firm also raised its Nifty target to 6900.

Sudarshan Sukhani, s2analytics.com, too is bullish on the market. He says this is the time to invest in equities. According to him, it is just the beginning of a multi-year bull market.

Sensex down 100 pts as banks lose momentum on profit booking

9:20 am Indian equity markets opened in the red today onmuted trends in other Asian marketsafter the Sensex hit successive all-time highs last weekonmuted trends in other Asian markets.

While the BSE Sensex opened down 91 points or 0.46 percent at 21146, Nifty opened down 0.41 percent at 6291.

Banking stocks like Bank of Baroda , IndusInd and ICICI Bank as well as the IT stocks were seen dragging the markets down on profit booking.

Even the Indian rupee opened weal at 61.85 against the US dollar.

The Samvat year 2070 began on an auspicious note as the Sensex hit a fresh lifetime high of 21,321.53 on all-round buying during the Muhurat trading session on Sunday. But it seems the indices are now coming to terms with reality.

“It is time to re-adjust your portfolios to ensure that you are not caught in a profit-booking frenzy which can come in anytime,” said IIFL in a research report.

Despite the equity indices rallying to life-time highs, retail investors are less likely to enter the market due to the uncertainty about future direction, say fund managers.

Mutual fund managers also expect that some investors may exit their investments, resulting in redemption pressure. “There is less likelihood of the retail investors coming into the market as they are in a wait and watch mode as of now. If market performs consistently, then inflows are likely,” Baroda Pioneer Mutual Fund managing director Jaideep Bhattacharya told PTI.

He said his fund house has not seen any redemption pressure so far, but investors may exit to book profits.

“The ongoing market rally is due to FII inflows. Many retail investors had burnt their fingers last time due to FII driven rally in the past. So, the likelihood of retail investors entering the market seems remote this time around,” LIC Nomura Mutual Fund chief executive Nilesh Sathe said. He is also of the opinion that the industry may see redemption pressure due to rally in the market. Sathe further noted that investors may relocate their investments to balanced funds where capital protection is high.

Quantum Mutual Fund chief executive Jimmy Patel, however, said there can be a trickle of inflows from retail investors due to higher market levels.

With PTI inputs