Sensex drops 166 pts as investors await stimulus

The domestic equity market on Thursday snapped the five day winning streak as investors became cautious ahead of announcements of IIP data for July, retail inflation data for August and European Central Bank's policy meeting later in the day.

The S&P Sensex closed 166.54 points, or 0.45% lower at 37104.28 after falling 222.15 points intra-day. NSE Nifty 50 slipped below 11000-level as it closed 52.90 points, or 0.48% lower at 10982.80.

The benchmark indices were dragged down by auto, realty, IT and FMCG stocks.

Of the 30-stock Sensex, 22 stocks ended in red, with major losers being YES Bank, Tata Motors, Maruti Suzuki, Axis Bank, Bharti Airtel, and Bajaj Auto losing up to 5.10%.

On the other hand, major gainers of the day were ICICI Bank, IndusInd Bank, Sun Pharmaceutical Industries, HDFC Bank, State Bank of India, and HDFC, gaining up to 2.13%.

Among the sectoral indices, six indices ended in red. The pack of losers were led by Nifty Auto (-1.88%), Nifty Realty (-0.88%), Nifty IT (-0.76%) and Nifty FMCG (-0.64%).

According to Deepak Jasani, head of retail research, HDFC Securities, markets ended lower on Thursday after a positive morning session as selling emerged in the afternoon session. Nifty fell after rising for the past five sessions.

"Technically, with the Nifty correcting after failing to cross key resistances, the bears could be making a comeback. Further downsides are likely in the near term once the immediate supports of 10965 are broken. Resistances to watch are now at 11082," Jasani said.

Motilal Oswal Financial Services in its research note said, "The fall in the market was on account of poor domestic factors like slowdown in economic growth and over 20-year low auto monthly sales volumes. Moreover, traders were booking profit ahead IIP and inflation numbers that will be announced on Thursday."

The note further said that Nifty has recently witnessed a recovery of 330 points from 10750 to 11080 zones in last six trading sessions but needs to surpass multiple hurdle of 11111 and 11141 zones to witness bullish momentum, else it may again get stuck in broader trading range.

"Now it has to cross and hold above 11000-11050 zones to witness an upmove towards 11111, then 11141 while a failure and drift below 10950 could take it to 10880-10850 zones," it said.

Bombay Stock Exchange - BSE

National Stock Exchange of India Ltd (NSE)