Markets break record-hitting spree, end lower

Shares of IT companies were in focus with the Nifty IT and S&P BSE IT index gaining more than 2% in an otherwise lower market

Benchmark indices settled lower in today’s session, taking a breather from a record-hitting spree ahead of RBI interest rate decision on Wednesday. Earlier in the day, Nifty scaled 9,700 for the first time during early-morning deals. Sensex also followed the suit, hitting new high at open.

The Reserve Bank of India (RBI) will likely strike a less hawkish tone while leaving interest rates unchanged at a policy meeting tomorrow, according to analysts, as inflation is running well below forecasts, and the economy has slowed more than expected.

Sentiment was also subdued after Asian shares fell amid a slew of risk factors, including escalating tensions in the Middle East, the coming testimony of the former FBI director, British elections and a European Central Bank meeting.

During the day, Nifty50 rose as much as 34 points to hit its new high of 9,709 while Sensex gained as much as 121 points to scale fresh high of 31,430 in the early morning deals.

The S&P BSE Sensex settled at 31,190, down 119 points, while the broader Nifty50 ended at 9,637, down 38 points.

In the broader market, the S&P BSE Midcap and the S&P BSE Smallcap indices erased morning gains to shed 0.6% and 0.7%, respectively.

"Market retreated from high as investors turned prudent ahead of domestic and global economic events this week, RBI & ECB meet and UK general election. The expectation on RBI policy is less hawkish while the tensions in Arab nations and narrowing gap between Conservative and Labour party after terror attack in Europe is keeping the market under caution," said Vinod Nair, Head of Research, Geojit Financial Services in a note.

Buzzing stocks

Shares of information technology (IT) companies were in focus with the Nifty IT and S&P BSE IT index gained more than 2% in an otherwise lower market. HCL Technologies, TCS, Tata Elxsi, Infosys were up in the range of 2% to 4%.

State Bank of India pared gains to end in red after rising as much as 2% to its highest in two weeks after a share sale to institutional investors to raise $2.33 billion was fully covered within hours of the launch on Monday.

Adani Enterprises surged as much as 9.4% in intra-day after the company gave final investment nod for the Carmichael coal mine and railway in Australia. The stock ended 8.7% higher.

Among decliners, India Grid Trust fell as much as 6.3% in its debut due to a lack of investor familiarity with infrastructure investment fund. The stock ended 1.3% lower.

Shares of Videocon Industries hit its lower circuit limit of 5% for the 12th straight session, falling 67% in 12 days to Rs 33.25 as investors continued selling the stock after two lenders declared its account as non-performing assets (NPA).

Global markets

World stocks fell while safe-haven gold and German government bonds were in demand on Tuesday as tension in the Middle East, an election in Britain and upcoming testimony from the former head of the FBI pushed investors away from risky assets.

European stocks fell early on Tuesday after leading Arab powers cut ties with Qatar the previous day, accusing it of supporting Islamist militants and Iran.

World stocks edged further away from record highs hit last week, the MSCI world equity index, which tracks shares in 46 countries, fell 0.12%.

MSCI's broadest index of Asia-Pacific shares outside Japan lost 0.15%, pulling back from a two-year high hit on Monday.

Japan's Nikkei .N225 dropped 0.6%, tripped by a stronger yen.

South Korean markets were closed for a holiday while Australian shares tumbled 1.4%.

Photograph: Sailesh Andrade/Reuters