Indian indices ended lower on Wednesday, snapping a four-day rally after Skymet's warning of 'below-normal' monsoon dampened prospects of higher farm and economic growth in the country.
During the day, the indices hit their all-time high levels as upbeat global factors boosted sentiment ahead of the Reserve Bank of India (RBI) policy meeting outcome on later this week.
The RBI is likely to cut rates for the second consecutive time this year with retail inflation continuing to remain low and domestic economy showing muted growth prospects. All the respondents of the CNBC-TV18's poll expect a 25 basis points rate cut.
The S&P BSE Sensex ended at 38,877, down 179 points, while the broader the NSE Nifty50 settled at 11,643, slipping 69 points. Meanwhile, broader markets underperformed the frontline indices with both the Nifty MidCap and the Nifty SmallCap indices declining over one percent each.
In intraday trade, the Sensex gained as much as 213 points to hit a new high of 39,270, surpassing previous high of 39,115, hit on April 1, 2019. The broader Nifty also touched a new high of 11,761, crossing a previous high, hit in August 2018.
Commenting on the all-time highs hit by the markets, Gautam Duggad, head of institutional research at Motilal Oswal Financial Services said the dovish global central bank sentiments coupled with consistent FII flows and expectations of current political dispensation making a comeback post-elections are driving the markets higher.
"However, valuations now look fair and one needs to be stock specific and selective from hereon. We prefer Banks, Discretionary Consumption plays and select Industrials," he added.
Indiabulls Housing Finance, Maruti Suzuki, Bajaj Finserv, HDFC, and HCL Tech were top gainers on Nifty50, while BPCL, IOC, Zee, GAIL, and SBI fell the most.
The Nifty Bank ended in red after hitting a new record high for a second straight session in intra-day deals. The Nifty PSU Bank index also slipped over 2.5 percent dragged by Syndicate Bank, Punjab National Bank, Allahabad Bank, Canara Bank and SBI, down in the range of 2-4.5 percent. All sectoral indices ended the day in the red.
Oil marketers Indian Oil Corp, Hindustan Petroleum Corp, and Bharat Petroleum Corp fell between 2.9 percent and 5 percent after Brent futures hit near five-month highs. The index was down 1.5 percent.
Globally, world stocks rallied to six-month highs on Wednesday as investors cheered signs of progress in US-China trade talks and reassuring economic data, helping push Germany’s 10-year bond yield back up to zero percent.
Europe’s stock markets rose almost 0.8 percent to their highest since August, tracking strong overnight gains in Asia, where MSCI’s broadest index of Asia-Pacific shares outside Japan climbed to a seven-month peak.
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