Markets continue to correct after lifetime peaks

MUMBAI: On Monday, equity benchmark indices fell in the opening trade, deepening corrections from their all-time highs for the second session in a row. Index heavyweight Reliance Industries was a major contributor to the decline after the company missed street estimates due to subpar results in the oil-to-chemicals (O2C) business.

As investors awaited the US Federal Reserve’s monetary policy decision, which is expected to be revealed this week, equities markets were also affected by foreign money outflows and crude oil prices that were trading above USD 80 per barrel.

The 30-share BSE Sensex fell 87.24 points or 0.13 to 66,597.02 on the trading day.

The larger NSE Nifty decreased by 10.65 points, or 0.05%, to 19,734.35.

In the first transaction, Kotak Mahindra and Reliance both fell more than 3% and over 2% respectively from the Sensex pack.

According to Prashanth Tapse, Sr. VP Research analyst at Mehta Equities Ltd., “RIL Q1 Results misses street estimates due to weak performance in oil-to-chemicals (O2C) business on account of a sharp reduction in crude oil prices and lower price realisation of downstream products.”

Other underperformers were JSW Steel, Tata Steel, and Tech Mahindra.

Mahindra & Mahindra and Larsen & Toubro, on the other hand, had gains of more than 1%.

Other winners included Tata Motors, IndusInd Bank, and Axis Bank.

18 of the 30 stocks were trading in the green, and 27 of the 50 stocks that make up the Nifty were doing the same.

According to V K Vijayakumar, Chief Investment Strategist at Geojit Financial Services, “the near-term market trend will be influenced by a host of factors like the recent Q1 results, some major results expected this week, and policy decisions like the outcome of the Fed meeting on Wednesday.”

Vijayakumar added that although the Fed is expected to increase rates by 25 basis points on Wednesday, the market’s reaction would depend on the Fed chairman’s predictions of future inflation and rate movements.