Mumbai: A late selloff in telecom major Bharti Airtel and financial stocks weighed on benchmark equity indices and erased early gains, making them to close lower on Tuesday in a session that saw Nifty once again form a small bearish candle, suggesting consolidation.
Telecom stocks were hammered the most, as their subscriber bases declined for the third month in a row. Midcaps and smallcaps took a major beating. While benchmark Sensex dropped 0.1 per cent to close at 38.365, peer Nifty shed 0.3 per cent to end at 11,317.
Analysts said the market will keep an eye on Indo-China border tensions in the days to come. “We’re seeing a normal correction and it is healthy for market. The recent dip is in line with profit taking in global markets. However, any further escalation of border tension between India and China may spook sentiment,” said Ajit Mishra, VP – Research, Religare Broking
Here is a lowdown on what happened in Tuesday’s trade:
Telecom stocks bleed
Telecom stocks were the worst performers, with BSE Telecom index declining 4 per cent. Bharti Airtel, was the top contributor to Sensex’s losses as it shed 3.36 per cent to Rs 497. Peer Vodafone Idea tumbled 7.80 per cent to Rs 11.34. Bharti Infratel dropped 8.06 per cent to Rs 212. According to India Ratings, the industry’s subscriber base continued to decline month-on-month in May for the third month in a row due to the outbreak of Covid-19, which led to issues like movement of migrant labourers to their hometowns and SIM card consolidation.
Midcaps, smallcaps see steep drop
Even as the frontline indices logged minor losses, BSE midcap index declined 1.49 per cent and the smallcap index 0.93 per cent. Among midcap stocks, Indian Hotels dropped 5.57 per cent and Future Retail 4.96 per cent, and in the smallcap pack, Bharat Dynamics and Parag Milk Foods dropped 13.88 per cent and 9.56 per cent respectively.
Dixon Technologies at record high
Dixon Technologies continued its winning run and logged a record high of Rs 9,766, as investors placed their bets on the contract manufacturer on India’s plan to reduce import dependency and shift production to India, coupled with globally declining preference for manufacturing in China. The stock later pared some gains and closed 7.63 per cent higher at Rs 9,604. The stock is up nearly 153 per cent for the year to date.
Bharat Dynamics tumbles
The stock fell 13.88 per cent to Rs 331.15 as the government’s 15 per cent stake sale in the defence company via offer for sale (OFS) route opened for non-retail investors today.
Promoter action: Adani Ports, Mindtree:
Promoters Gautam S Adani and Rajesh S Adani on behalf of S B Adani Family Trust revoked the pledge on 30,00,000 shares of Adani Ports and Special Economic Zone. The shares of ports operator however, dropped 2.2 per cent to Rs 343.95. Promoters Krishnakumar N, Siddarth Krishnakumar and Akila Krishnakumar collectively sold 2,10196 shares of Mindtree. Shares of the IT firm dropped 1.87 per cent to Rs 1,183.40.
Stocks at 52-week highs
As many as 112 stocks hit their respective 52-week highs on BSE. They included Tata Consultancy Services, HCL Technologies, Adani Green Energy, Amber Enterprises, Dixon Technologies, IndiaMART InterMESH, Infibeam Avenues and Ramco Systems, among others.
Stocks that hit upper circuits
Even as market breadth continued to be weak, more stocks rose by their daily limit, than those that hit their lower circuits. The 255 stocks that hit their upper circuits included Dish TV India, Repco Home Finance, IFL Enterprises and CL Educate, among others.
Stocks that flash sell signals
Some 82 stocks flashed ‘sell’ signals on BSE, as they slipped below the signal line on the MACD indicator. These included Adani Enterprises, SpiceJet, LIC Housing Finance, DCB Bank and Sun TV Network, among others.
Where is Nifty headed?
Analysts said a drop below 11,250 level may attract selling in Nifty, and believe the 11,450 level may continue to pose the immediate hurdle. “The index saw a new low on a closing price chart in this corrective swing, which is in progress from the highs of 11,794 level,” said Mazhar Mohammad, Chief Strategist – Technical Research & Trading Advisory, Chartviewindia.in. “This correction shall get accelerated further going forward if the index falls below 11,250 level, towards an initial target of 11,100,” he said.