Sensex slips 500 points off its high by afternoon as IT shares drag

Indian shares gave back about half their morning gains by early afternoon on Monday, as selling in information technology stocks took the shine off a rally built on Reliance Industries and cheaper oil.

At 2 pm the Sensex stood at 75,111.79, up 652 points, or 0.88%, and the Nifty 50 at 23,247.40, up 194 points, or 0.84%. Both were well off their peaks. The Sensex had touched 75,557.06 in the morning, a rise of about 1.5%, and the Nifty 23,360.50. At 1:37 pm, the weakest point of the afternoon so far, the Sensex was only 576 points higher at 75,035.42.

Where the selling came from

The drag came mainly from technology. The Nifty IT index fell nearly 1%, with Infosys among the biggest losers on the Nifty, alongside Sun Pharma, ICICI Bank, Adani Ports and Axis Bank. Traders booked profits in the large names that had run up in the first hour, and the pull-back was gradual rather than sharp: the Sensex was 863 points higher at noon and 766 points higher at 1 pm.

The broader market held up better. At 12:11 pm the Nifty Midcap index was up 1.16% and the Smallcap index 0.8%.

Results keep the bulls busy

Company earnings kept individual stocks moving. Dixon Technologies rallied as much as 13.5% to ₹12,490, even though its September-quarter profit fell 48.7% to ₹343.7 crore. Revenue rose 46.7% to ₹21,794 crore, and the fall in profit came mainly from a smaller fair-value gain on its stake in Aditya Infotech. Its rise helped the Nifty Consumer Durables index climb more than 2% by 1:11 pm.

NTPC rose 3.7% to ₹328 at about 1:20 pm after the power producer reported a profit rise of close to 40%. Bank of Baroda gained more than 5% after a record quarterly profit, and Eureka Forbes jumped about 9% to ₹342 on better earnings. State Bank of India rose 2.3% to ₹984 ahead of its results on Tuesday.

Reliance Industries, up as much as 8.2% to ₹1,260 after a 41% rise in quarterly profit, remained the day’s main support. Coal India rose as much as 4.8% after it said coal supplies crossed 70 million tonnes in October for the first time, at 70.3 million tonnes. Tata Steel, Shriram Finance and JSW Steel were also among the leading gainers.

Oil eases, ITC slips

Oil marketing companies gained as Brent crude fell as much as 3.6% to $109.40 a barrel. Indian Oil climbed nearly 5% to ₹136.40, helped also by a 174% jump in its quarterly profit. ITC slipped into the red ahead of its September-quarter results, and Marico also traded lower before its numbers.

Traders will watch whether the Nifty can hold above 23,200 into the 3:30 pm close.