Market Wrap: Sensex ends 368 points lower, Nifty below 24,500 on volatile Tuesday; HDFC Bank, ICICI Bank turn major spoilers

Indian benchmark indices ended in the red in a volatile Tuesday session though managing to recover from the day's low. Banks turned out to be the main spoilers led by heavyweights HDFC Bank and ICICI Bank.

While the S&P BSE Sensex settled at 80,235.59, down 368.49 points or 0.5%, the broader Nifty closed at 24,487.40, lower by 97.65 points or 0.4%.

Top Gainers & Losers

The top five gainers on Nifty were Tech Mahindra, Maruti Suzuki, Hero MotoCorp, Mahindra & Mahindra (M&M) and NTPC while the top losers were Bajaj Finance, Trent, Hindustan Unilever, Nestle India and Eternal.

Banks and financials were at the receiving end of investor's ire with Nifty Bank settling 0.84% lower while Nifty Financial Services closing 0.9% down. Among the gainers were Nifty Auto, Nifty IT, Nifty Pharma and Nifty Oil & Gas which were up between 0.4% and 0.7%.

Expert View

Commenting on the day's action, Nagaraj Shetti, Senior Technical Research Analyst at HDFC Securities said that Nifty witnessed selling pressure after a stellar upward move of Monday.

"After opening with a positive note the market surged higher in the early-mid part of the session. However, sharp weakness got triggered from the day's high of 24700 and the market remained weak in the mid to later part of the session. A small red candle was formed on the daily chart with long upper shadow. Technically, this market action indicates a lack of strong upside momentum to surpass the overhead hurdle. The bulls may hold the ground as long as the base of 24300 is protected," he said.

In his view, the short term uptrend that resumed after a sharp up move of Monday remains intact and he expects buying to emerge from near the supports of 24,300-24,400 levels in the coming sessions. Hence, one may expect Nifty to retest the crucial hurdle of around 24700 in the short term.

Global Markets

Most top Asian indices ended in the green. While Japan's Nikkei 225 closed with gains of 0.65%, Hong Kong's Hang Seng index finished 0.6% up. China's Shanghai Composite settled 0.19% higher while Hong Kong's Hang Seng index finished with an uptick of 0.77%. China's Shanghai Composite settled 0.16% higher.

Most major European indices were also trading in the green around 4 pm today. UK's FTSE 100 was up 0.20% while French CAC 40, Spain's IBEX 35 and Stoxx 600 advanced by 0.12%, 0.04% and 0.20%, respectively. Meanwhile, Germany's DAX was 0.4% lower.

Currency Watch

The Indian rupee inched higher on Tuesday, while forward premiums slipped, with traders focusing more on upcoming U.S. inflation reading than on India's data, given the uncertainty over the Federal Reserve's policy path.

The rupee was quoting at 87.6425 at 11.22 am IST, up slightly from 87.66 on Monday. The currency had opened a tad weaker at 87.7050. The implied yield on the one-year dollar/rupee forward premium was down 2 basis points at 2.06%.

(Inputs from agencies)