Sensex, Nifty snap 3-day winning run as private banks plunge
Dalal Street experts blamed higher market valuation for the fall on Wednesday.
Sentiment turned sombre in light of weak global cues after the US President Donald Trump reaffirmed his tough stance on trade tariffs.
At home, poor auto sales numbers hit risk appetite. Auto and ancillary stocks plunged in Wednesday’s trade after industry lobby Siam reported a 21 per cent drop in passenger vehicle (PV) sales in May, the worst monthly fall in 18 years.
Dalal Street experts also blamed higher market valuation for the fall in the absence of directional triggers.
“Market is falling under its own weight given that there are no triggers. Valuations are weighing on the bourses. Nifty50 is trading at a P/E multiple 29 times, which is the highest in decades. Statistically, this high valuation sustains for less than 5 per cent of the time in a bull cycle,” said Umesh Mehta, Head of Research, Samco Securities.
Market participants are now awaiting April industrial growth and May retail inflation numbers, slated for release later in the day, to get directional cues.
Sensex ended 194 points, or 0.48 per cent, down at Rs 39,756.81, with 7 stocks advancing, 23 declining and one unchanged.
The NSE counterpart Nifty closed 59 points or 0.50 per cent lower at 11,906.20, with 14 stocks up, 35 stocks down and one stock unchanged.
Midcaps and smallcaps followed benchmark Sensex as their sectoral indices on BSE fell up to 0.79 per cent.
YES Bank settled as the top loser in the Sensex kitty. The lender’s shares declined over 3 per cent to Rs 134.65, a day after Moody’s placed the bank’s ratings under review for a downgrade.
Besides, two independent directors of the bank have resigned in the last two days.
Among the losers in the Sensex kitty, YES Bank was followed by Maruti Suzuki (down 1.79 per cent), Kotak Mahindra Bank (down 1.65 per cent), Hero MotoCorp (down 1.55 per cent) and Bajaj Auto (down 1.38 per cent).
Tata Steel, on the other hand, logged a gain of 2.60 per cent to settle at Rs 2.60 per cent. ONGC (up 0.86 per cent), Vedanta (up 0.50 per cent), Sun Pharma (up 0.47 per cent), TCS (up 0.25 per cent) and Reliance Industries (up 0.19 per cent) also settled in the green.
Among the sectoral indices on BSE, the metal pack was the lone gainer, closing 0.48 per cent higher. The BSE FMCG index settled flat.
Gains in shares of Tata Steel, Vedanta, Jindal Steel and SAIL kept the metal pack up.
The rupee traded marginally higher even as crude oil prices fell more than 2 per cent in international markets on concerns over a weaker demand outlook amid rise in US crude inventories.