Sensex Today: Key equity benchmark indices turned volatile in the latter half of the trading session on Wednesday as profit-taking emerged in select IT, financial and metal shares.
The BSE benchmark from a new all-time high of 71,913, pared gains and slipped into red to a low of 70,824 – down nearly 1,100 points from the peak. The Sensex quoted around 70,850 – down over 550 poitns. The NSE Nifty 50 slipped below the 21,300 level.
Tata Steel, SBI and NTPC were the major losers, down over 2 per cent each. Tata Motors, HCL Technologies, Mahindra & Mahindra and JSW Steel were the other prominent losers.
The broader indices cracked sharply – The BSE MidCap and SmallCap indices dropped over 1 per cent each.
Dr. V K Vijayakumar, Chief Investment Strategist at Geojit Financial Services, said: “Even as the holidays are fast approaching, the market is not in a holiday mood. It is consolidating, but at higher levels. The steady rise in the mother market US, which has helped the Dow to set a new record high, is exhibiting the same trend. The fact that the fear gauge – VIX – is at a low level of 12 is an indicator of the underlying strength of the market. Valuations in the mid and small cap segments are excessive. Chasing mid and small caps at these valuations is risky. Going forward, large-caps are likely to outperform. Even if they don’t, safety is in large caps. Investors should give importance to safety in this time of optimism. Declining bond yields in the US means FIIs will continue buying Indian stocks. The New Year is likely to witness a fresh bout of FII buying. Large caps like RIL which have not participated much in the rally may see action.”
Global Cues
Meanwhile, overnight the US markets ended with near the highs of the day, with gains of up to 0.7 per cent as the Fed rate-cut hope rally continued. Dow Jones scaled fresh a peak, while the S&P 500 is now withing 1 per cent of a new all-time high.
That apart, the People’s Bank of China held its one-year loan prime rate at 3.45 per cent, while the five-year benchmark loan rate was unchanged at 4.2 per cent.
Among key markets in Asia, Nikkei was up 1.7 per cent, Hang Seng 1.25 per cent, Kospi 1 per cent, and ASX 200 0.5 per cent.
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