Sensex, Nifty snap three-day winning streak on profit booking

The Indian equity benchmarks snapped their three-day winning streak on Tuesday as investors turned to profit booking after the benchmarks surged to record highs in the previous session ahead RBI’s monetary policy meet. The Sensex fell as much as 271 points and Nifty 50 index briefly dropped below its important psychological level of 22,400.

The Sensex ended 111 points lower at 73,904 and Nifty 50 index slipped 9 points to settle at 22,453.

Market sentiment turned cautious a day ahead of Reserve Bank of India's (RBI) Monetary Policy Committee meet which will begin on Wednesday and the outcome will come on Friday. Analysts expect the Reserve Bank of India maintain repo rate 6.5 per cent and cut in rates is expected in third quarter of current financial year.

SBI Research expects a rate cut by the RBI in the third quarter of FY25. Despite moderate fuel prices, inflation is primarily being driven by food price dynamics, with CPI inflation expected to remain slightly above 5.0 per cent in the remaining months of FY24. The report forecasts a decline in inflation till July 2024, followed by a peak in September 2024 before decelerating.

Seven of 15 sector gauges compiled by the National Stock Exchange ended lower led by the Nifty IT index's 0.7 per cent decline. Select pharma, healthcare, financial services and private bank shares also faced a mild selling pressure.

On the flipside, metal, auto, media, PSU bank, real estate and consumer durables witnessed buying interest.

Mid- and small-cap shares outperformed their larger peers as Nifty Midcap 100 index rose 1.16 per cent and Nifty Smallcap 100 index advanced 1.22 per cent.

Among the individual shares, Aditya Birla Fashion and Retail rose as much as 17 per cent after the company said that it aims to vertically demerge its Madura Fashion & Lifestyle business into separate listed entity.

Hero MotoCorp was top Nifty loser, the stock fell 2.43 per cent to Rs 4,680.75. Kotak Mahindra Bank, HCL Tech, ICICI Bank, SBI Life, Infosys, Apollo Hospitals, Larsen & Toubro and Wipro also fell between 0.7-1.9 per cent.

On the other hand, Tata Consumer Products, Mahindra & Mahindra, Bharat Petroleum, Bajaj Auto, Adani Ports and Tata Motors were among the gainers.

The overall market breadth was positive as 2,847 ended higher while 1,004 closed lower on the BSE.