Stock markets end 3-day winning run as IT, private bank shares drop on profit-taking

Mumbai: Stock markets snapped the three-day winning run on Tuesday with benchmark Sensex falling by 110 points due to profit-taking in select IT, private bank and auto shares amid weak trends from the US markets and foreign fund outflows.

The 30-share BSE Sensex declined by 110.64 points or 0.15 per cent to settle at 73,903.91 with 16 of its components ending lower and 14 settling higher. During the day, the index dropped by 270.78 points or 0.36 per cent to a low of 73,743.77 points.

The broader NSE Nifty closed lower by 8.70 points or 0.04 per cent at 22,453.30 despite recovery at the fag-end..

Both Sensex and Nifty scaled lifetime high levels in intra-day trade on Monday before settling around 0.5% higher.

"The domestic market took a breather today after achieving a fresh record high yesterday. Factors such as a rising dollar, increasing US bond yields, and a notable uptick in crude oil prices collectively dampened investor sentiment," Vinod Nair, Head of Research, Geojit Financial Services said.

Better-than-expected US manufacturing data raised worries about a potential delay in interest rate cuts by the US Fed, Nair added.

"Nifty snapped its three-day rally despite a sharp recovery in the last half an hour. Global stocks were mixed on Tuesday after Wall Street fell as surprisingly strong US manufacturing data created doubts over how soon the US Federal Reserve might cut interest rates," said Deepak Jasani, Head of Retail Research, HDFC Securities.

From the Sensex basket, Kotak Mahindra Bank fell the most by 1.84 per cent. ICICI Bank dropped 1.63 per cent, HCL Technologies by 1.82 per cent, and Infosys by 0.84 per cent. Tata Consultancy Services, Wipro, Tech Mahindra and Larsen & Toubro were the major laggards.

Mahindra & Mahindra, Nestle, Tata Motors and IndusInd Bank were among the gainers.

In the broader market, the BSE smallcap gauge jumped 1.28 per cent and the midcap index climbed 1.14 per cent..

Analysts said mid and small-cap stocks continued their recovery rally, although concerns about high valuations lingered. Moreover, investors are eagerly anticipating guidance from the upcoming RBI monetary policy announcement for insight into near-term market direction.

Among the sectoral indices, teck fell by 0.71 per cent, IT declined 0.54 per cent, telecommunication (0.38 per cent) and bankex (0.19 per cent).

Consumer Durables climbed 1.82 per cent, services jumped 1.56 per cent, metal (1.21 per cent), utilities (1.21 per cent) and commodities (1.17 per cent).

In Asian markets, Shanghai settled lower while Tokyo, Seoul and Hong Kong ended in the positive territory. European markets were trading mostly in the green. Wall Street ended mostly lower on Monday.

Foreign Institutional Investors (FIIs) offloaded equities worth Rs 522.30 crore on Monday, according to exchange data.

Global oil benchmark Brent crude climbed 1.61 per cent to USD 88.83 a barrel.

India's manufacturing sector growth climbed to a 16-year high in March on the back of the strongest increase in output and new orders since October 2020, amid reports of buoyant demand conditions, a monthly survey said on Tuesday.

The seasonally adjusted HSBC India Manufacturing Purchasing Managers' Index (PMI) surged to a 16-year high of 59.1 in March, from 56.9 in February, reflecting stronger growth of new orders, output and input stocks as well as renewed job creation.

In Purchasing Managers' Index (PMI) parlance, a print above 50 means expansion while a score below 50 denotes contraction.

In its third straight day of gains, Sensex jumped 363.20 points or 0.49 per cent to settle at 74,014.55 while Nifty climbed 135.10 points or 0.61 per cent to close at 22,462.