Global cues, pharma sector woes pull markets down

Mumbai, July 27 Negative global cues emanating out of Asian markets subdued India's key equity indices on Tuesday.

Notably, the Asian markets came under pressure after China continued to crackdown on its internet businesses.

Besides, Q1FY22 numbers from Indian corporates also failed to excite the investors.

Accordingly, markets opened higher, but by pre-noon they failed to hold on to their initial gains.

Consequently, the S&P BSE Sensex closed at 52,578.76, lower by 273.51 points or 0.52 per cent from its previous close.

Similarly, the NSE Nifty50 ended the day's trade at 15,746.45, lower by 78 points or 0.49 per cent from its previous close.

"Asia's stock markets fell to fresh troughs on Tuesday led by a third straight session of heavy selling in Chinese internet giants. Food delivery arms to be the latest affected by new regulations guaranteeing workers above minimum pay after regulatory crackdowns in the education and property sectors earlier," said Deepak Jasani, Head of Retail Research at HDFC Securities.

"With US Fed meet and F&O expiry over the next two days, we could see heightened volatility in the markets. 15,632-15,824 could be the band for the Nifty over the next 1-2 sessions," Jasani said.

Vinod Nair, Head of Research at Geojit Financial Services, said: "The domestic market skewed in favour of the bears, failing to hold onto its early gains due to weak global cues and selling in pharma stocks.

"Bleeding pharma companies pulled down the market due to a weak start to sector earnings season. It created panic as the sector is priced with high expectations. Broadly, barring metals and consumer durables, all major sectors traded in negative territory."

S. Ranganathan, Head of Research at LKP Securities, said: "Stocks gave up gains today as investors were nervous on the selling across Chinese markets by global funds coupled with the policies of the Chinese authorities and the likely impact on Indian markets despite knowing that it is also a positive for India.

"While we did see profit booking across 'banks' and the 'pharma' pack on account of negative newsflow on few pharma names, certain pockets across the broader market like textile exporters and coffee stocks posted smart gains on the back of rising coffee futures."