Market’s seven-day winning streak ends as FMCG stocks drag indices lower

The benchmark Sensex and the Nifty ended with losses for the primary time in eight buying and selling periods amid losses in client stocks. After climbing to an intra-day excessive of 62,245, the Sensex settled at 61,716, down 49 factors, or 0.08 per cent. The 50-share Nifty noticed a deeper reduce ending at 18,419, 58 factors, or 0.3 per cent lower. In the earlier session, each the indices had ended at report highs, having gained shut to five per cent in simply seven buying and selling periods.

Earnings disappointment by FMCG main Hindustan Unilever (HUL) weighed on the market. While the company met revenue estimates, the stress on margins attributable to rising uncooked materials costs upset the Street. HUL shares fell 4.1 per cent to finish at Rs 2,546. Industry peer ITC lost 6.2 per cent to Rs 246. Both fell essentially the most amongst Sensex stocks and dragged the index lower by 215 factors. Gains in expertise and banking stocks helped offset the losses. Tech Mahindra gained essentially the most at 4 per cent, whereas Infosys rose 1.6 per cent. HDFC Bank and Kotak Mahindra Bank rose over a per cent every.

Overall, market breadth was weak on Tuesday with solely 979 advancing stocks and a pair of,382 declining stocks on the BSE.

The broader market noticed a pointy correction. The Nifty Midcap 100 shed 2.2 per cent, whereas the Nifty Smallcap 100 fell 1.7 per cent.

Other main declining stocks included Tata Motors (down 4.9 per cent), Eicher Motors (4.5 per cent).

With the exception of tech and power, all BSE sectoral indices ended with losses. BSE Realty and BSE FMCG fell essentially the most at 4.6 per cent and three.1 per cent, respectively.

Experts mentioned the risk-reward within the market has turned unfavourable following the sharp up transfer since August. Rising bond yields and commodity costs are anticipated to place stress on the markets, they mentioned. Any disappointment in company earnings may spook the markets as premiums stay at elevated ranges, added consultants.

Among the Nifty parts which have declared outcomes up to now, IT firms have managed to beat analyst estimates whereas FMCG has upset.

“Accelerated demand and good quarterly corporate results have kept the investor’s interest sanguine. However, rising global commodity and energy prices continue to be a cause of worry. In this environment of high bullishness, one need to stay grounded of various risks including valuations. We would suggest investors remain sector or stock specific. With a lot of heavyweights reporting their numbers this week, it would keep the markets volatile,” mentioned Siddhartha Khemka, Head – Retail Research, Motilal Oswal Financial Services.

After hovering 9 per cent a day earlier, India Vix index rose one other 1 per cent to 17.4.

“The IT sector continued to hold the fort, while the rest of the recent performers like reality and auto went into a sell-off mode. The market is expected to get more stocks and sector specific as parameters are extremely stretched,” mentioned Vinod Nair, Head of Research, Geojit Financial Services.

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