Sensex drops 61 points, Nifty ends flat as TCS falls over 5 per cent

Mumbai: The benchmark BSE Sensex dropped by 61.16 points to close at 33,856.78 on Tuesday while broader Nifty closed almost flat due to the fag-end profit booking in select banking and FMCG shares and a sharp fall in TCS.

The broader NSE Nifty managed to end higher for the second day at 10,426.85, up by 5.45 points or 0.05 per cent as losses in TCS and ITC were offset by gains in HPCL, Axis Bank and Gail.

Stock markets remained volatile throughout the day amid mixed Asian markets as investors awaited the US inflation data later in the day for cues about the pace of Fed rate hikes.

Shares of Tata Consultancy Services (TCS) fell by 5.22 per cent to Rs 2,892.45 following reports that its promoter Tata Sons is planning to raise around Rs 8,200 crore by selling stake in the IT major. FMCG major ITC dropped 0.5 per cent and while private lenders Kotak Bank and HDFC Bank fell up to 1.46 per cent, wiping out early gains.

The BSE Sensex had opened lower at 33,818.22 on weak Asian cues, but soon recovered to regain 34,000-mark to hit a high of 34,077.32 on positive macro-economic data. However, profit-booking at fag-end dragged the index to a low of 33,722.96 before ending at 33,856.78, down by 61.16 points or 0.18 per cent.

"Market gained a positive momentum on account of easing inflation and better than expected IIP data. However, selling in IT and profit booking in banks failed to keep positivity throughout the day," said Vinod Nair, Head of Research, Geojit Financial Services Ltd.

Retail inflation surprisingly slowed for the second consecutive month to 4.4 per cent in February from 5.1 per cent in January and 5.2 per cent in December. Factory output grew at a robust pace for the third straight month, at 7.5 per cent in January.

"While subdued Asian stocks lent to the volatility in the markets, positive macro-economic data at home marginally lifted domestic sentiment," Anand Shah, Deputy CEO and Head of Investments BNP Paribas Mutual Fund.

In the IT space, TCS dropped 5.22 per cent, HCL Tech 0.89 per cent and Infosys 0.45 per cent.

Other losers included Kotak Mahindra Bank, Coal India, NTPC, Maruti Suzuki, L&T, M&M, HUL, ITC, HDFC Bank, Adani Ports, IndusInd Bank, ONGC and Power Grids, falling up to 1.46 per cent.

Gitanjali gems came under heavy selling pressure and lost about 5 per cent to close at Rs 14.30.

PNB shares ended higher at 3.59 per cent to Rs 98 on hopes of settlement of fraud dues.

Axis Bank, Sun Pharma, Bharti Airtel, Wipro, Dr Reddy's, ICICI Bank, Tata Steel, SBI, Hero MotoCorp, Bajaj Auto, Yes Bank, HDFC Ltd, Tata Motors, Asian Paints and RIL ended in the positive zone, rising up to 2.23 per cent and capped the fall. Among the BSE sectoral indices, IT fell the most at 1.56 per cent, followed by Teck (1.06 per cent) and FMCG (0.01).

While, oil and gas rose 1.63 per cent, realty 1.56 per cent, PSU 1.39 per cent, consumer durables 1.32 per cent, healthcare 1.04 per cent, metal 0.49 per cent, bankex 0.43 per cent, infrastructure 0.37 per cent and power 0.28 per cent.

Auto rose by 0.22 per cent and capital goods by 0.09 per cent after strong industrial production data. Bucking the trend BSE small-cap index rose by 1.14 per cent and mid-caps gained 1 per cent as retail investors raised their bets. Overseas, most Asian stocks ended mixed and European equities opened slightly up as investors awaited release of the US inflation data later in the day for clues on the pace of US Fed rate hike. Shanghai Composite Index fell 0.49 per cent while Japan's Nikkei end higher by 0.66 per cent and Hong Kong's Hang Seng edged up 0.02 per cent. In the Eurozone, Paris CAC 40 rose 0.44 per cent and Frankfurt moved up 0.20 per cent in their early deals. UK's FTSE also traded higher 0.05 per cent.