Sensex retreats 494 pts from day's high, Nifty50 gives up 17,900 as financial shares make a U-turn

Indian equity benchmark Sensex and Nifty50 erased all of their intraday gains in the second half of the day in a volatile session on Monday. Weakness in private sector financial stocks dragged the headline indices lower though strength in IT shares kept the downside in check. Cautious gains in other markets around the globe ahead of a key meeting of the Bank of Japan this week failed to reflect on Dalal Street.  

Both main gauges finished 0.3 per cent lower. The Sensex shed 168.2 points to end at 60,093 and the Nifty50 settled at 17,894.9, down 61.8 points from its previous close. 

Thirty two stocks in the Nifty50 basket ended lower. Adani Enterprises, Axis Bank, Hindalco, JSW Steel, Maruti Suzuki, NTPC, Apollo Hospitals, HDFC, SBI Life and Larsen & Toubro were the top laggards, closing around 1-3 per cent lower.

Five of India's largest IT companies -- TCS, Infosys, HCL Tech, Wipro and Tech Mahindra -- were the top gainers in the 50-scrip basket, rising around 1-3 per cent each. Hero MotoCorp, PowerGrid, Bajaj Finance, SBI and ITC were the other top gainers in the Nifty universe.

Reliance and HDFC Bank were the biggest drags on both main gauges, accounting for 120 points to the loss in the 30-scrip index.

Federal Bank shares closed higher by Re 1.8 or 1.3 per cent at Rs 140.3 apiece on BSE, after the private sector lender reported a record quarterly profit.

Analysts await more of quarterly results from India Inc for domestic cues. Asian Paints, IndusInd Bank, ICICI Bank, MPhasis, Persistent and Havells are slated to report their earnings this week.

"IT is a very difficult time for the market... The results season till now has brought no major negative surprise," AK Prabhakar, Head of Research at IDBI Capital, told Zeebiz.com. 

Overall market breadth was skewed in favour of the bears, as 1,691 stocks rose and 1,910 fell on BSE.

High volatility in the market can be attributed to subdued Q3 results, soft Budget expectations and aggressive hikes in benchmark interest rates, according to Vinod Nair, Head of Research at Geojit Financial Services.

Official data showed wholesale inflation eased to a 22-month low of 4.95 per cent in December thanks to softening food prices.

Global markets

European markets edged higher amid gains in healthcare shares. The pan-European Stoxx 600 index was up 0.1 per cent at the last count. 

S&P 500 futures were down 0.3 per cent. Wall Street will observe a holiday later in the day and resume trade on Tuesday.

Earlier on Monday, MSCI's broadest index of Asia Pacific shares outside Japan rose 0.4 per cent. Japan's Nikkei fell 1.2 per cent, China's Shanghai Composite rose one per cent and Hong Kong's Hang Seng finished flat. 

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