Sensex ends in the red on 1st trading day of the year; Tata Steel rallies 3%; HDFC tanks 3%

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NEW DELHI: The domestic equity market ended the first trading day of calendar year 2017 in the red, mainly due to a sharp fall in the banking stocks.

In his address to the nation on the New Year’s Eve, Prime Minister Narendra Modi asked banks to prioritise lending towards the poor and MSMEs. Right from the word go, Modi’s speech was largely tilted towards the rural economy, owing to which financial stocks took a beating on Monday, analysts said.

Some economists criticised the move, saying it could put an additional burden on the banking system, while any attempt by the government to subsidise the banks for such efforts could created additional burden on fiscal deficit.

The S&P Sensex of the Bombay Stock Exchange opened at 26,711 on Monday against the previous close of 26,626 before closing at 26,595, down 31 points. The 30-share index hit an intraday high of 26,720 and a low of 26,447 with Tata SteelBSE 3.80 % (up 3.80 per cent) ending as the top performer and HDFC (down 3.42 per cent) ending up as worst laggard.

Blue chip stocks HDFC, InfosysBSE -0.90 % and ICICI BankBSE -1.37 % contributed the most to the fall in the index. The broader Nifty50 of National Stock Exchange (NSE) closed flat at 8,179.

“The New Year has started on a flat note after a smart rally last week. Auto stocks were in the limelight given the limited losses in the monthly numbers compared with the general consensus. Investors are awaiting for the earnings season to kickstart to evaluate the pressure on profitability,” said Vinod Nair, Head of Research, Geojit BNP Paribas Financial ServicesBSE 2.75 %.

In the broader market, the S&P BSE500 index closed 36 points higher at 11,072, with MMTCBSE 17.06 % being the top gainer and Yamini Investments the top loser.

In the midcap and smallcap segments, the S&P BSE Midcap index surpassed equity benchmark Sensex to settle 100 points higher at 12,131 while S&P BSE Smallcap index moved a step further to close 144 points higher at 12,190.

In the sectoral landscape, banking stocks bled the most, followed by financial stocks for the reason cited above. The S&P BSE Bankex plunged 246 points to 20,503, thanks to a free fall in the shares of ICICI Bank, State Bank of IndiaBSE -2.46 % and IndusInd BankBSE -1.85 %.

Global markets:
All the major Asian and European stock markets were closed on Monday on account of New Year holidays.

Commodities:
Gold prices ended steady at Rs 28,300 per 10 gm on the first trading day of 2017 on scattered demand from local jewellers. Silver declined by Rs 100 to Rs 39,300 per kg owing to reduced offtake by industrial units.

Currency:
The rupee opened nearly 3 paise down at 67.95 against dollar on the first day of Calendar 2017 following global cues.