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Financials, higher crude pull Sensex down 301 pts, Nifty below 10,600; Bajaj Finance up 4%

Benchmark indices extended losses for fourth consecutive session on Thursday, weighed by banking & financials, metals, infra and oil stocks.

Likely fiscal imbalance due to higher crude oil prices and continued uncertainty over the formation of government in Karnataka dented investors’ sentiment.

US-China trade negotiations and weaker rupee that was crossed 68 against the US dollar also weighed down the market.

The 30-share BSE Sensex closed below psychological 35,000 levels, falling 300.82 points or 0.86 percent to 34,848.30 while the 50-share NSE Nifty ended tax below 10,600-mark, down 86.30 points at 10,596.40.

For the week, benchmark indices declined 2 percent each.

“With lack of any fresh positive triggers globally and on the domestic bourses, we expect the markets to consolidate in the near term,” Jayant Manglik, President, Religare Broking said.

However, the ongoing correction should be considered as good opportunity for long term investors to accumulate fundamentally sound stocks on dips, he advised.

With more corporate earnings scheduled in the next week, stock specific volatility would continue to remain high, he feels.

Manglik said the behaviour of crude oil prices and movement of INR versus USD will be closely monitored in the coming sessions. Traders should strictly avoid overleveraged positions, he added.

Crude oil prices remained higher in trade, aided by strong demand, looming sanctions on Iran, plummeting Venezuelan production and Nigerian disruptions. Brent crude futures, the international benchmark for oil prices, were up 0.42 percent at 79.63 a barrel at the time of writing this article.

Asian shares mostly closed higher despite weakness on Wall Street while European stocks were mixed amid the latest US-China trade developments. China’s Shanghai was up 1.23 percent while South Korea’s Kospi, Japan’s Nikki and Hong Kong’s Hang Seng gained up to half a percent.

Meanwhile, the uncertainty continued as to who will form the government in Karnataka. The Supreme Court today ordered that floor test in the Karnataka assembly be held at 4 pm on Saturday.

The Indian rupee ended at 68.01 a dollar, down 31 paise from previous settlement. It fell for the sixth consecutive week against the US dollar, posting biggest weekly fall since week ended April 20, 2018.

The broader markets underperformed frontliners as the Nifty Midcap index fell 1.4 percent amid corporate earnings. More than two shares declined for every share rising on the NSE.

All sectoral indices ended in the red barring FMCG that gained 1.25 percent. Nifty Metal and Pharma indices were down more than 2 percent while Auto declined 1.7 percent.

ICICI Bank, L&T, Tata Motors, Tata Steel, Indiabulls Housing, Sun Pharma, Wipro and Cipla topped the selling list among Nifty50 stocks, down 3 percent each. HDFC, Reliance Industries, SBI, Axis Bank, ONGC and HPCL fell over 1 percent.

Bajaj Auto was down 1.5 percent and Ashok Leyland shed 3.9 percent on profit booking after March quarter earnings met analyst expectations.

Bajaj Finance (up 4 percent) and Bajaj Finserv (up 2.88 percent) were top Nifty50 gainers for the second consecutive session after March quarter earnings.

HUL hit record high intraday, up more than 2 percent while ITC, Kotak Mahindra Bank and Tech Mahindra gained up to 2.5 percent.

Avenue Supermarts lost 5 percent as promoter Radhakishan Damani will sell up to 1 percent stake in open market to meet minimum public shareholding norm.

Strides Shasun plunged 23 percent after it reported consolidated loss from continuing operations at Rs 4.4 crore for the March quarter against profit of Rs 91.6 crore in year-ago.

Amara Raja Batteries, SRF, Voltas, Nalco, Graphite India, HEG, Escorts, Jyothy Labs, Radico Khaitan, Wockhardt, Jet Airways, Venkys and Granules India fell up to 14 percent while Colgate Palmolive, Jubilant Foodworks, Endurance Technologies, Balrampur Chini, Dhampur Sugar, JK Tyre, Central Bank of India, Karnataka Bank, Rupa and PI Industries gained up to 7 percent.

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