Sensex And Nifty Start Weak, Stalling A Three-Day Winning Streak

Indian equity benchmarks start the week on a ginger note, stalling a three straight sessions of gains, as investors eye domestic and international inflation data, which will clarify the direction of monetary policy path.

The BSE Sensex index fell 372.15 points to 54,109.69, and the Nifty index was down nearly 0.6 per cent at 16,126.45, dragged by technology companies after top IT services provider Tata Consultancy Services (TCS) missed estimates for June-quarter profit.

Shares of TCS fell 2.3 per cent, after it missed quarterly profit estimates by a wide margin as employee-related expenses soared. The index heavyweight also pulled down the tech index by 2 per cent.

On the other hand, D-Mart owner Avenue Supermarts jumped 2.9 per cent after strong earnings results.

That ginger start is a pre-cursor to investor caution and jitters ahead of key economic data releases in the week ahead.

Reuters reported that Asian shares started cautiously on Monday as investors braced for a US inflation report that could force another super-sized hike in interest rates, and the start of an earnings season where profits could be under pressure.

An upbeat US June payrolls report – a key gauge of employment health – already has the market wagering heavily on a hike of 75 basis points from the Federal Reserve this month.

Domestic investors will also eye India’s retail inflation release, due on Thursday at 1730 IST.

“Local stocks are likely to drift lower in morning trades Monday, as key Asian indices, especially Chinese gauges, lost considerable ground after its annual inflation climbed to 2.5 per cent in June against the market forecast of 2.4 per cent,” said Prashanth Tapse, Vice President for Research at Mehta Equities.

“However, stock specific action is likely to command investors’ attention, as the undertone of the market remains caution to bearish,” he added.

That comes as world stocks have lost over $20 trillion in value since January peaks and as investors brace for more colossal wealth wipe.