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Money News

Banks, Reliance drag Sensex, Nifty lower; IT stocks surge on HCL outlook

BENGALURU (Reuters) - India’s main stock indexes snapped two sessions of gains to end a tad lower on Monday, dragged by banks and heavyweight Reliance Industries Ltd, although a rally in IT stocks after HCL Technologies raised its outlook capped losses.

The Bombay Stock Exchange building is seen from a facade in Mumbai, India, May 16, 2018. REUTERS/Francis Mascarenhas/Files

The NSE Nifty 50 index closed 0.21% lower at 11,440.05, while the S&P BSE Sensex ended down 0.25% at 38,756.63.

Top private-sector lender HDFC Bank Ltd dropped 1.9% and was the biggest drag on the indexes, while ICICI Bank Ltd fell 1.8%. The Nifty Bank Index slid 1.7%.

“(The) market is in an over-bought zone, so sentiment is weak,” said Rahul Sharma, market strategist and head of research at Equity99 markets, adding, there would be volatility in the coming sessions.

Buoyed by a flush of liquidity in global markets, India’s main stock indexes have rallied more than 50% since a coronavirus-led selloff in March, even as domestic cases soared.

On Monday, however, the Nifty Smallcap 100 jumped 5.4% and the Nifty Midcap 50 Index rose 2.6% after the country’s markets regulator said multi-cap funds must invest at least 25% each in large-cap, mid-cap and small-cap stocks.

IT firm HCL Technologies Ltd was the biggest percentage gainer on the Nifty, jumping 10.2% to a record high after it upgraded revenue and operating margin outlook for the September quarter.

It gave a fillip to IT stocks, pushing the Nifty IT index 4.7% higher to an all-time peak.

Reliance Industries ended 0.7% lower after hitting a record high earlier in the session, after local daily Mint reported that private equity firm Carlyle Group was looking to invest up to $2 billion in the conglomerate’s retail business.

Investors are also awaiting August inflation data due later in the day, likely to have stayed above the central bank’s medium-term target range for the fifth straight month, according to a Reuters poll.

Reporting by Chris Thomas and Chandini Monnappa in Bengaluru; editing by Uttaresh.V and Rashmi Aich

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