The markets settled at their five-week lows as PSU banks and metal stocks tanked, while escalating tensions between the United States and North Korea continued to drive investors away from risk assets.
The Nifty PSU Bank index dipped nearly 5% after Oriental Bank, Union Bank of India and State Bank of India fell 5% each post disappointing earnings for the June quarter. Meanwhile, volatility index India VIX hit its highest in six months, suggesting market participants expect major volatility on the Nifty over the next thirty days.
Benchmark indices ended the session and the week on a negative note, with indices seeing big cuts in the day’s trade.
The Sensex closed down 317.74 points at 31213.59, while the Nifty ended lower by 109.45 points at 9710.80. The market breadth was negative as 1,003 shares advanced against a decline of 1,525 shares, while 135 shares were unchanged.
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The benchmark Nifty50 pared losses in the last leg of trade to end the first day of August series above 10,000-mark, up 1% for the week. Sensex, on the other hand, also ended marginally lower for the day but up 1% for the week. The street was dragged down by after Dr. Reddy’s extended fall for the second straight day post weaker Q1 quarterly earnings. Negative cues from Asian markets after US tech shares pulled Wall Street slightly lower also contributed to the losses.
Broader markets outperformed benchmark indices with BSE Midcap and BSE Smallcap, up 0.5% and 0.4% respectively.
Focus now shifts to Reserve Bank of India’s two-day monetary policy meeting, which is set to begin next week on Tuesday, while the outcome is expected on Wednesday.
HDFC, Infosys, Kotak Mahindra Bank, Adani Ports and ONGC gained the most on BSE Sensex while Dr Reddy’s, Sun Pharma, Lupin, ICICI Bank and HeroMoto Corp lost the most on the index
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