Mumbai: The equity markets failed to sustain their winning momentum after hitting a near two-year high on Thursday as investors turned cautious at higher levels and booked profits in frontline pharma and bank stocks.
Tracking gains in US equities, which rallied to a record high on Wednesday, both the Sensex and Nifty opened the trading session on a solid note and touched their highest level since March 2015. While the Nifty hit an intra-day high of 8,992.50 rising as much as 0.52 per cent, the Sensex hit an intra-day high of 29,145.62 gaining 0.56 per cent in the initial hours of trading.
However, heavy selling in pharma and select bank stocks led to a sharp slump in both the benchmark indices.
The Nifty fell 92.75 points or 1.03 per cent from its day’s peak to end the session at 8,899.75. On the other hand the Sensex slumped 305.83 points or 1.04 per cent from its days high to close the session at 28,839.79.
Pharma stocks witnessed heavy selling after one of the subsidiaries of Wockhardt Ltd received warning letter from the US FDA.
The stock tanked 5 per cent on the BSE. The development triggered selling in the shares of other pharma stocks like Sun Pharma (down 2.63 per cent) and DrReddy’s Laboratories (down 1.98 per cent).
“Firm global cues led a gap up start but existence of psychological hurdle and overbought market situation pulled the index gradually lower as the day progressed. It is a normal profit taking which may extend further; however, the downside also seems capped. Since, stocks are expected to witness volatile swings during the consolidation phase, traders should remain extra cautious in stock selection and focus on trade management,” said Jayant Manglik, Religare Securities.
The broader markets also remained extremely weak with 1,978 stocks on BSE ending the day in the red as compared to just 915 stocks that advanced.
According to the provisional data released, FPIs bought equities worth Rs 122.94 crore.
