Domestic equity markets ended the session in red on Monday on their initial gains, as a sell-off in metal stocks dampened investor sentiment. After rallying 605 points in intra-day trade, the Sensex fell 37.78 points to 54,288.61 on Monday and the broader Nifty-50 fell 51.45 points, or 0.3%, to 16,214.70. Among the Sensex stocks, Tata Steel lagged behind the top and contributed the most to the fall as it fell 12.53% on Monday, its worst one-day fall since August 2015.
With Monday’s fall, the domestic market has fallen nearly 5% so far in May, posting losses in 11 of the month’s 15 sessions. Market Fear Measure – India VIX spikeed to 23.39 on Monday, up more than 20% from 19.42 at the end of April.
Consistent with the headline indicators, broader markets also ended in red on Monday. The BSE mid-cap ended 0.3% lower, while the small-cap index fell 0.6%. Overall, 2,048 stocks out of 3,577 stocks traded on the BSE declined on Monday.
However, automakers – M&M and Maruti Suzuki – rose more than 4% on Monday, following the Centre’s decision to reduce excise duty on petrol and diesel prices. In addition, the decline in steel prices is seen as a major positive for the consumer sector, such as infrastructure and automobiles.
Srikanth Chauhan, Head (Retail) of Equity Research, Kotak Securities, said, “After a strong start, the markets have failed to sustain their initial rise and have lost track of a slightly lower finish. Metal stocks suffered losses, realty and oil and gas stocks also came under selling pressure, dragging down key indices. “He added that a new uptrend to 16,475 levels could be seen if the Nifty manages to end above 16,300.
Foreign portfolio investors (FPIs) have again become net sellers after Friday’s purchase. On Monday, foreign investors offloaded ভারতীয় 251.7 million worth of Indian equity, bringing sales to $ 4.2 billion this month. In contrast, local investors, including mutual funds, bought মূল 186.5 million worth of shares, according to temporary data available on the exchange.
With the exception of Nifty IT, Auto and Consumer Durables, all major sectors ended red on Monday – Nifty Metal was the worst performer, down 8.14% – the worst day since March 2020. Brokerages believe that the government’s decision is likely to significantly affect the sector’s profitability. Edelweiss Securities said in a note on Monday: “The recent announcement by GoI, imposing tariffs on carbon / stainless steel exports, could significantly reduce the sector’s profitability. On a larger canvas, the move has stalled the recent rise of the Indian steel industry in the global arena. While we expect some volume of exports to be maintained as key players seek to maintain their market share, their cash generation capacity is likely to decline, resulting in lower RoE. “