Markets break 5-day winning streak; Midcaps outperform

Markets ended lower on Tuesday as investors booked profits after sharp gains recently which saw both the benchmark indices rising to all-time closing highs.

FMCG, Pharma and IT shares were among the top losers.

The market sentiment was also hit adversely after a survey showed that India's vast service sector activity remained weak in the month just gone by.

The 30-share Sensex ended down 265 points at 20,975 after hitting an intra-day low of 20,952 and the 50-share Nifty ended down 64 points at 6,253 after touching an intra-day low of 6,244.

According to Ranak Merchant, Technical Analyst - Strategies, Sushil Financial Services, “Benchmark indices may get into a consolidation / correction zone post a stellar show seen in the recent past with Sensex scaling to new life-highs while Nifty missing the same by a whisker. However, individual stock would continue to outperform the benchmarks.

Levels to watch for Nifty would be 6209 (Nifty spot) as support on closing basis.”

GLOBAL MARKETS

Asian shares sagged on Tuesday after hawkish comments from China's premier ahead of a key Communist Party meeting, though expectations that the US Federal Reserve will maintain its stimulus for a while limited losses.

The euro continued to languish on rising expectations that the European Central Bank will cut rates further, with a few expecting the ECB to take action as early as its Thursday meeting.

MSCI's broadest index of Asia-Pacific shares outside Japan slipped about 0.2%, though Japan's Nikkei stock average bounced off its lows and managed a 0.2% gain.

INDIAN MARKETS

Indian services firms recovered slightly last month from the worst slump in over four years in September but activity still shrank and a shortage of new orders means a rebound looks some way off, a survey showed on Tuesday.

The HSBC Services Purchasing Managers' Index (PMI), compiled by Markit, rose to 47.1 last month from 44.6 in September, which was the weakest reading since April 2009.

Meanwhile, Goldman Sachs upgrades its view on India to "market weight", with a target for the Nifty of 6,900 points.

RUPEE

The rupee weakened in trade today due to dollar demand from importers, who are covering up their requirements after the Diwali holiday yesterday.

At 15:45 PM, the rupee was trading at Rs 61.61 compared with Friday's close of Rs 61.74 per dollar.

SECTORAL INDICES

Defensive segments like FMCG and Healthcare reeled under maximum selling spell, plunged between 2-3%. Sectors like IT, TECk, Banks, Consumer Durables and Capital Goods slipped between 0.5-1%.  However, BSE Realty and PSU indices ended marginally positive.

The broader markets outperformed the benchmark indices- BSE Midcap and Smallcap indices gained by nearly 1% each.

The market breadth in BSE ended marginally positive with 1,264 shares advancing and ,1121 shares declining.

GAINERS & LOSERS

From the FMCG and pharma space, ITC, HUL, Sun Pharma and Dr Reddy’s Labs slumped between 2-4%.

Adds Daljeet S Kohli, head of research, IndiaNivesh Securities, “We suggest investors should stay put in the market with strong set of companies in their portfolio. They should avoid high beta stocks. At all times we need to be careful about the valuation, hence stay away from FMCG stocks”.

Shares of BHEL were down over 1.5% on profit taking after recent gains ahead of its second quarter earnings scheduled for release on Wednesday.

Other notable losers were ICICI Bank, TCS, Sesa Sterlite, ONGC and Bharti Airtel.

On the gaining side, Coal India, Hindalco, Tata Motors, Tata Steel and Tata Power gained between 1-2%.

SMART MOVERS

Shares of Suven Life Sciences were up 3.5% after hitting a 52-week on receipt of two product patents one each from US and Japan corresponding to its New Chemical Entities (NCEs).

Shares of IL&FS Engineering and Construction were up nearly 5% after the company said it has received a huge order worth Rs 675 crore for construction of residential buildings in central Mumbai.

Sundaram Brake Linings surged over 7% after the company reported net profit of Rs 1.89 crore in Q2 September 2013 as compared to net loss of Rs 1.89 crore in Q2 September 2012.