Benchmark indices on Monday created new records but came off the highs on profit booking as investors looked beyond the Narendra Modi-government formation to focus on the upcoming Fed meeting and the priorities of the Centre for the first 100 days.
The Sensex breached the 77000 mark in early trades and touched a new historic intra-day peak of 77079.04. However, it soon came under selling pressure as participants took some money off the table after a three-day rally. The gauge slipped 203.28 points, or 0.27 per cent, to end at 76490.08.
On the NSE, the broader Nifty lost 30.95 points, or 0.13 per cent, to end at 23259.20. In intra-day trades, it climbed 121.75 points, or 0.52 per cent, to hit a record high of 23411.90.
Market circles said the sentiment remains positive and stocks are likely to resume their upward journey on strong retail investor appetite.
They pointed out the two-day Fed meeting is the key event for now. All eyes will be on Fed chief Jerome Powell on whether he will give a timeline for rate cuts.
While some experts feel the US central bank could start cutting rates from September, others feel it will be towards the end of the calendar year or early next year.
At the same time, the markets are also awaiting the announcement of the 100-day agenda of the new government which could lead to some stock specific action. After that the attention will turn towards the Union budget which could be presented next month.
“Volatility returned to markets, as Sensex slipped from its new high and fell sharply towards the close amid profit-taking in IT, metals and oil & gas stocks. Lacklustre sentiment also prevailed due to weak global cues after recent data from the US indicated that rate cut may not happen soon,” said Prashanth Tapse, senior VP (research), Mehta Equities Ltd.
Provisional data showed foreign portfolio investors (FPIs) as net buyers to the tune of ₹2,572 crore.
“While cement stocks gained on expectations of a government push to the housing sector and the lowering of GST on cement, post the government formation, the market is awaiting fresh triggers. It will pick up cues from the key cabinet portfolio allocation,’’ Siddhartha Khemka, head — retail research, Motilal Oswal Financial Services said.
“On the global front, sentiments got dented post strong non-farm payroll data which led to hopes diminishing with regards to rate cut in second half of the year. Investors are now awaiting US Fed and Bank of Japan policy outcome this week along with US and India CPI data. Thus market is likely to consolidate this week till the clarity emerges,’’ he said.
