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Sensex recovers from 380 pts fall to end flat; PSU banks rally

The market was dragged down by consumer durables, FMCG and IT counters.

Jul 09, 2019, 04.23 PM IST
NEW DELHI: Equity benchmarks Sensex and Nifty rebounded after heavy morning selloff to end flat in a volatile trading session on Tuesday as investors awaited TCS quarterly results, scheduled to be announced later in the day.

The market was dragged down by consumer durables, FMCG and IT counters as Budget tax proposals continued to spook investors. Meanwhile, pharma, energy, oil & gas and power indices offered some support.

Analysts said Union Budget proposal to tax share buybacks, impose higher taxes on the super-rich and increase minimum public shareholding in listed companies kept investors jittery.

TCS remained in focus throughout the day as it ended as the top loser on BSE Sensex at Rs 2,131.45, down 2.05 per cent as investors awaited for fresh cues from corporate results that will kick off later in the day.

The Tata group firm is expected to report a 2.5-3.2 per cent quarter-on-quarter (QoQ) rise in revenue growth in constant currency (CC) terms. Profit is expected to drop 4-6 per cent sequentially while margins are seen falling 90-150 basis points, led by wage hikes and rupee appreciation. The management commentary on banking and finance (BFS) space, sub-contractor expenses and any visibility on double-digit growth in FY20 would be keenly tracked.

Analysts expect markets to remain volatile for the next few days with focus now shifting on upcoming quarterly results where expectations remain muted and macro economic data.

Asian stocks continued their struggle on Tuesday after strong US jobs data reduced expectations of an aggressive rate cut by the US Federal Reserve at the end of July.

Globally, investors’ focus also shifted to Fed Chair Jerome Powell’s testimony before Congress later in the week for clues on monetary policy as investors assess prospects for monetary easing following some conflicting signals on the US economy.

BSE Sensex closed 10.25 points or 0.03 per cent higher at 38,730.82 while NSE Nifty ended at 11,555.90, down 2.70 points or 0.02 per cent.

Market at a glance
In the 30-pack Sensex, 15 stocks ended in the green and 15 in the red with TCS as the worst performer and Bajaj Finance best. ITC, HCL Tech, Maruti Suzuki and Asian Paints too joined TCS on the losers list, slipping up to 3 per cent.

Sun Pharma, Hero MotoCorp, L&T and RIL were among other Sensex stocks that advanced.

The BSE Midcap index advanced 0.63 per cent and the BSE Smallcap index ended 0.05 per cent higher outperformed benchmark Sensex.

BSE Consumer Durables index recorded losses of 6.76 per cent followed by FMCG and IT index. While BSE Healthcare, Energy, Oil & Gas and Power index were among the best performers.

In terms of index contribution, RIL, L&T, Bajaj Finance and Sun Pharma were the top support while HDFC twins, TCS and ITC were the top drag on Sensex.
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