Sensex snaps 4-session losing run after BJP's record showing in Guj

NewsDrum Desk
08 Dec 2022
Sensex snaps 4-session losing run after BJP's record showing in Guj

Mumbai: Equity benchmark Sensex ended four days of losses on Thursday, buoyed by gains in select banking and auto counters, after the ruling BJP headed for a record victory in Gujarat but failed to retain Himachal Pradesh.

Persistent selling by foreign investors and mixed global cues capped the gains, traders said.

The 30-share index opened lower but gained momentum as the session progressed, before finally ending 160 points higher at 62,570.68. A total of 13 of its components advanced while 17 declined.

On similar lines, the broader NSE Nifty advanced 48.85 points to settle at 18,609.35, with 27 of its constituents closing in the red.

Axis Bank, IndusInd Bank, L&T, ICICI Bank, Infosys, SBI, Bajaj Finserv and M&M were the major gainers among Sensex stocks, climbing up to 2.71 per cent.

Sun Pharma fell the most by 3.57 per cent after the USFDA listed its Halol facility under an import alert, with products manufactured at the unit now subject to refusal of admission in the US market. PowerGrid, TCS, Nestle, Wipro, Kotak Bank  and Bajaj Finance were among the other losers.

"After touching a record high, the domestic market experienced significant volatility as global markets tumbled due to fear of an economic slowdown and worries over a Fed rate hike. Recession fears weighed on IT and pharma stocks while banks, especially PSBs, continued to support the bourses.

"This volatility is expected to sustain in the global market as we await the Fed policy decision and US inflation numbers due next week," said Vinod Nair, Head of Research at Geojit Financial Services.

On the political front, the BJP was on Thursday poised to retain power in Gujarat for a record seventh straight term but was set to be dethroned by the Congress in Himachal Pradesh, where the hill state followed its long history of an incumbent government being voted out.

Riding on the charisma of Prime Minister Narendra Modi, who addressed 31 election rallies in his home state and continued to hold sway over voters, the Bharatiya Janata Party (BJP) steamrolled the opposition that included the new entrant Aam Aadmi Party (AAP) by winning or leading in 157 of the 182 seats in Gujarat with a vote share of nearly 53 per cent.

If the trends continue, the BJP would not only beat its best showing till date -- 127 seats in 2002, but also surpass the all-time record set by the Congress party in 1985, when it won 149 seats under the leadership of late Madhavsinh Solanki.

In winning a seventh term, the party would also equal the Left Front's feat in West Bengal.

"Markets are seeing time-wise correction and weak global cues are delaying the recovery. We feel the consolidation may continue for some time however buoyancy in the banking pack coupled with buying in select index majors may result in a further rebound.

"Meanwhile, we recommend continuing with stock-specific trading approach and focusing on buying opportunities," said Ajit Mishra, VP - Technical Research, Religare Broking Ltd.

Shares were mixed in Europe and Asia ahead of the release of US jobless data on Thursday and inflation numbers on Friday. US futures turned higher and oil prices rebounded.

In Asian trading, the Shanghai Composite lost 0.1 per cent, Tokyo's Nikkei 225 declined 0.4 per cent while Hong Kong's Hang Seng rose by 3.4 per cent. Australia's S&P/ASX 200 dropped 0.8 per cent and South Korea's Kospi declined 0.5 per cent.

Brent crude oil gained 28 cents to USD 77.45 per barrel.

The rupee consolidated in a narrow range and settled 3 paise higher at 82.44 (provisional) against the US dollar on Thursday, supported by positive domestic equities.

Foreign Institutional Investors (FIIs) were net sellers in capital markets as they offloaded shares worth Rs 1,241.87 crore on Wednesday, according to exchange data.

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