Sensex, Nifty fall in early trade as Axis Bank results drag banking stocks; FIIs remain net sellers
Benchmark indices opened lower on Friday as weak Q1 results from Axis Bank dragged banking stocks. Continued FII selling and cautious sentiment around earnings further weighed on markets. Power stocks bucked the trend while global markets remained mixed.
Mumbai: Equity benchmark indices Sensex and Nifty declined in initial trade on Friday dragged by foreign fund outflows and a muted start to the earnings season.
Analysts said sentiment among banking stocks is especially cautious in response to Axis Bank’s latest financial results, which fell short of market expectations.
The 30-share BSE Sensex declined 185.67 points to 82,073.57 in early trade. The 50-share NSE Nifty dropped 45.4 points to 25,066.05.
From the Sensex firms, Axis Bank tumbled nearly 5 per cent after the firm reported a 3 per cent dip in its June quarter consolidated net profit at Rs 6,243.72 crore, impacted by the implementation of changes in non-performing assets and loan upgrade policy.
According to Devarsh Vakil, Head of Prime Research, HDFC Securities, Axis Bank’s latest financial results, fell short of market expectations.
“Notably, Axis Bank’s GDR tumbled 4.8 per cent to USD 64.30 on Thursday, following a deterioration in the bank’s asset quality during the June quarter,” he said.
Meanwhile, Bharti Airtel, Kotak Mahindra Bank, Eternal and Tech Mahindra were also among the laggards.
However, Power Grid, Mahindra & Mahindra, Tata Steel and Tata Motors defied the broader market trends and were among the gainers.
Foreign Institutional Investors (FIIs) offloaded equities worth Rs 3,694.31 crore on Thursday, according to exchange data.
“In July, so far, India has been underperforming most markets, with a dip of 1.6 per cent in Nifty. A significant contributor to the decline is the selling by FIIs.
“There is a clear pattern in FII activity this year so far. They were sellers in the first three months. For the next three months they turned buyers. And in the seventh month the trends so far indicate further selling unless some positive news reverses the downtrend in the market,” VK Vijayakumar, Chief Investment Strategist, Geojit Investments Ltd, said.
In Asian markets, South Korea’s Kospi and Japan’s Nikkei 225 index quoted lower while Shanghai’s SSE Composite index and Hong Kong’s Hang Seng traded in the positive territory.
The US markets ended higher on Thursday.
Global oil benchmark Brent crude dipped 0.04 per cent to USD 69.49 a barrel.
On Thursday, the Sensex dropped 375.24 points or 0.45 per cent to settle at 82,259.24. The Nifty ended lower by 100.60 points or 0.40 per cent to 25,111.45.
