Markets Drop 0.8% By Day's End

The markets today remained stubbornly down over negative investor sentiment as well as on the RBI’s fresh comments that there is less scope for easing of the monetary policy. The 30-share BSE Sensex fell by 140 points to 17490, while Nifty breached the 5300 levels, falling by 46 points to 5287.

Overall, the sentiment has remained negative for the past four trading sessions. Current issues like the Parliamentary deadlock, high inflation and policy paralysis is taking a toll on the markets.

Among the global indices, Asian markets remained largely in the red, with Shanghai and Hang Seng witnessing negative trades. Only Nikkei saw some gains.

The European indices have widened their losses after a negative opening, with CAC and DAX declining over 0.6% and FTSE in losses of over 0.5%.

Due to the decline in the broader sentiment, the markets remained optimistic on the defensive FMCG and HC stocks. In fact, CLSA has advised selling Tata Steel and buying pharma stocks like Lupin and Sun Pharma. Baer Capital Partners is also bullish on these two sectors, with an overweight rating for them. Both the indices ended the day in gains, while all the others were in the red. Realty declined by as much as 3% as the sector's growth has come to a 6-year low. Metals, Auto and Oil & Gas have also witnessed a decline of over 1% each.

Among the Sensex stocks, only 8 companies managed to close in the green while the others were in the negatives. Tata Power was the top gainer, up 0.8%. The scrip, however, came off from its intra-day high of 2%. ITC and Maruti Suzuki also gained over 0.5% each. Meanwhile, HSBC has upgraded Wipro from 'neutral' to 'overweight' on the back of its competing abilities for large deals and has also on the grounds that the company is well positioned to improve its sales. The stock was marginally up by 0.28%.

Sterlite was down by nearly 5% by closing. The scrip has lost as much as 9.5% in the last two trading sessions in line with strong corrections in the other Metals stocks as well due to the ongoing issues in the mining sector. In the Auto space, Bajaj Auto, Hero and Tata Motors were all in the losers list. The shares of Infosys and TCS were also in the red, and Infosys has said that the business environment remains very challenging.

Among the other shares, Wockhardt gained 6.7% by day's end. The scrip will be trading in the T category by next month, and hence, investors should be cautious on the stock. United Spirits and United Breweries have also gone up today.

Reliance Communications has hit a new low at Rs 48. The company has been under pressure as it has cancelled its tower business IPO. A few days ago, it was hit by the Canadian research house Veritas.

The advance-decline ratio on the BSE remained in favour of the bears, as more stocks declined.

The markets currently lack a positive trigger. As we have stated previously, the volatile market conditions will persist tomorrow on account of the August series expiry.