Sensex, Nifty fall in early trade; Tata Motors, BCL Industries, Sona Comstar rise up to 12%

Indian benchmark indices opened lower on Tuesday amid the mixed and sluggish global cues and hawkish commentary from the US Federal Reserve, which hinted at continued aggressive monetary tightening.


Cautious commentary from Tata Consultancy Services’ (TCS) management kept traders on the tenterhooks and weakness in the heavyweight IT counters weighed on the headline peers, dragging them lower.


At 9.23, the 30-share pack BSE Sensex dropped 224.28 points or 0.37 per cent lower to 60,523.03, while NSE’s barometer Nifty50 declined 55.15 points or 0.31 per cent to 18,046.05.


Despite the volatility yesterday, the close above the 18,070 region has retained upside hopes, but with modesty targets of 18,240-320. Meanwhile, an early inability to float above the 18,040-18,000 region today, could initiate a breakdown towards 17,800, said Anand James – Chief Market Strategist at Geojit Financial Services.


However, broader markets outperformed mainline indices as BSE midcap and smallcap indices were almost flat. Fear gauge India VIX spiked about 3 per cent to 15.01-level.


On a sectoral front, weakness in IT, banking, financials and FMCG counters offset the buying in autos and metal shares. Pharma and realty packs were also among the gainers.


On Nifty50, Tata Motors rallied 5 per cent after strong Q3 updates. Hindalco and Tata Steel gained 2 per cent each, whereas JSW Steel, Power Grid and Apollo Hospital were up a per cent each.


Among the losers, TCS was down 2 per cent after December quarter earnings, followed by a similar cut in Infosys. Britannia, Hero Motocorp, Either Motors and HDFC Bank were down a per cent each.


TCS results indicate continuing growth for the IT industry with slightly weakening deal wins, said VK Vijayakumar, Chief Investment Strategist at Geojit Financial Services. “Results of Infosys and HCL Technologies due this week will throw more light on the short-term prospects of the industry,” he said.


In the broader Markets, BCL Industries rose 12 per cent over fund raising plans, whereas Sona BLW Precision added 6 per cent over acquisition of Novelic. Tanla Platforms, Rama Steel Tubes and Safari Industries 5-7 per cent each.


On the contrary, Reliance Communications tanked 5 per cent, whereas Nureca, Honda Power, South Indian Bank, Uco Bank and Indian Overseas Bank dropped 3-4 per cent each.

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