Markets end lower as Karnataka, Korea keep investors on edge

Benchmarks stayed on the back foot for the second straight session on Wednesday as post-poll uncertainty in Karnataka and flaring up of tensions on the Korean peninsula sapped investor optimism.

Banking stocks were battered after scam-scarred Punjab National Bank (PNB) posted a record loss for the March quarter amid the government tightening the screws on some senior public sector bankers.

The BSE Sensex sank 156.06 points to end at 35,387.88, while the Nifty lost 60.75 points to 10,741.10

Jockeying for power intensified in Karnataka, with both the JD(S)-Congress combine and the BJP trying to outmanoeuvre each other in the race for forming the government.

Globally, most Asian markets fell after North Korea unexpectedly cancelled high-level talks with Seoul and threatened to call off the much anticipated summit with the U.S., reigniting tensions on the peninsula.

The 30-share Sensex opened lower at 35,452.35 points and moved between 35,241.63 and 35,543.89 before finally finishing at 35,387.88, down by 156.06 points, or 0.44%.

The 50-share NSE Nifty too stayed in the red through the session and settled 60.75 points, or 0.56% lower at 10,741.10. Intra-day, it moved between 10,699.70 and 10,790.45.

On the macro front, India’s trade deficit widened to $13.7 billion in April, which further hit sentiment, brokers said.

Foreign portfolio investors (FPIs), who have been net sellers in the past few sessions, sold shares worth a net ₹518.47 crore, while domestic institutional investors (DIIs) bought shares worth ₹531.33 crore yesterday, according to provisional data.

“Uncertainty over the formation of government in Karnataka and lower than expected quarter earnings have created concern about market direction. Fall in oil prices and appreciation in rupee helped to trim the day’s losses.

“Consumption oriented companies are performing well on account of increased spending in rural market...,” said Vinod Nair, Head of Research, Geojit Financial Services.

Among Sensex constituents, ICICI Bank saw a huge fall of 3.28%, followed by RIL 2.34%, SBI 2.19%, Hero MotoCorp 2.10%, Adani Ports 1.25%, HDFC Ltd 1.02%, Bharti Airtel 1.01%, ONGC 0.90%, L&T 0.82%, HDFC Bank 0.72%, Bajaj Auto 0.51% and Axis Bank 0.35%.

Shares of Punjab National Bank plunged 12.15% after the company on Tuesday posted a loss of ₹13,416.91 crore for the January-March period, the biggest ever by any domestic lender.

In contrast, HUL continued its upward journey and emerged as the biggest gainer by rising 3.84%, largely riding on encouraging earnings.

Shares of ITC Ltd too rose 1.47% after the company today reported a 9.86% increase in standalone net profit at ₹2,932.71 crore for the fourth quarter.

Other gainers were Wipro, Yes Bank, Asian Paints and Sun Pharma.

In sectoral terms, the BSE oil and gas index emerged as the worst performer, losing 1.58%, followed by PSU 1.18%, bankex 1.17%, infrastructure 0.66%, auto 0.31%, consumer durables 0.23%, capital goods 0.21%, metal 0.19%, power 0.18% and healthcare 0.06%.

However, realty index topped the list by rising 1.99%, followed by FMCG, IT and teck indices.

The broader markets depicted a mixed trend, with the BSE mid-cap index falling 0.27% while the small-cap inched up 0.06%.

Overseas, most Asian indices ended lower, with Japan’s Nikkei falling 0.44% and Shanghai Composite Index shedding 0.71%. Hong Kong’s Hang Seng too fell 0.13% and Singapore lost 0.20%.

European shares turned weak in their late morning deals. Frankfurt’s DAX shed 0.04% and Paris CAC 40 edged lower by 0.14%. London’s FTSE, however, gained 0.09%.