Equity benchmarks closed with modest losses on Tuesday after a seven-session winning streak as investors opted to pocket some gains at record levels.
FMCG counters led the losses after Hindustan Unilever’s Q2 earnings missed estimates, while IT and private bank stocks stood tall.
After scaling the 62000-mark for the first time, the 30-share BSE Sensex succumbed to selling pressure at the fag-end of trade to close 49.54 points or 0.08 per cent lower at 61716.05.
The Nifty shed 58.30 points or 0.32 per cent to close at 18418.75. It touched a new intra-day record of 18604.45 in early deals.
ITC was the top laggard in the Sensex pack, followed by HUL at 4.06 per cent. Titan, Tata Steel, UltraTech Cement and PowerGrid were among the other losers. Tech Mahindra, L&T, Bajaj Finserv, Infosys, HDFC Bank and Kotak Bank were among the gainers, spurting up to 4.12 per cent.
“The stretched rally booked some gains by the end of the trading day. The IT sector continued to hold the gains while the rest of the recent performers like realty, PSU banks and auto went into a sell-off,” said Vinod Nair, head of research at Geojit Financial Services.
“Our advice is to transform personal equity portfolios into a balanced basket with high weightage on defensive stocks. The Indian market is expected to get more stocks and sector specific as parameters are extremely stretched,” he said.
A foreign brokerage has downgraded Reliance Industries Ltd just days ahead of its second quarter earnings report citing rich valuations.
Anil Sharma and Aditya Bansal, analysts at Nomura, cut RIL’s rating to neutral from buy, though they lifted the target price to Rs 2,850 from Rs 2,400.
RIL shares on Tuesday closed at Rs 2731.50 — a gain of 0.91 per cent over the previous close.
Over the past three months, the scrip has inched up 28 per cent, outperforming the benchmark Nifty, which was up 12 per cent.
“Apart from the improving outlook for its operating business, we believe the recent strength has also been coming from investors taking Reliance’s recent forays into new energy and new materials businesses a lot more positively… There is still limited clarity on RIL’s new energy plans, overall capex, returns’’, the brokerage said.
Nomura said that though the outlook for each of its key operating business has been improving, valuations have become expensive after the recent strong upward movement.
“We downgrade RIL to Neutral on our expectation of limited near-term upside,’’ the analysts added.
Tobacco stocks fell on Tuesday on news the Centre has formed a panel to suggest a future taxation policy on tobacco from a public health perspective.
The ITC stock fell over 6.32 per cent to end the day at Rs 245.95.
Godfrey Phillip was down 0.93 per cent to Rs 1,302.55, VST 2.64 per cent to Rs 3,703.95 and Golden Tobacco 0.93 per cent to Rs 153.65.
The panel will analyse the existing tax structure for all forms of tobacco — smoking and smokeless — and develop a road map for taxation.