Sensex loses most gains to end flat after sell-off in Reliance Industries

Indices fall over 2% from day's high

The benchmark indices Sensex and Nifty ended flat, after slipping more than 2 per cent in the last hour of trade amid a sell-off in Reliance Industries (RIL) and banking heavyweight HDFC Bank. Information technology (IT) stocks, however, logged strong gains, buoyed by better-than-expected results of Wipro.

In intra-day trade, the Sensex rose as much as 777 points — recouping more than the previous day’s 661-point fall — amid sharp overnight gains on the Wall Street, as success of a potential Covid-19 vaccine that is in early stage trials boosted sentiment. The optimism also lifted most Asian and European markets. The Sensex climbed to an intra-day high of 36,810 and the Nifty touched 10,827 before ending at 36,052 and 10,618, respectively.

Shares of RIL climbed 3.2 per cent to a new record of Rs 1,979, ahead of its much-watched annual general meeting (AGM). The stock, however, dropped nearly 7 per cent from the day’s high to end at Rs 1,842. Market players said concerns that the deal with Saudi Aramco might fall through triggered a sell-off in the stock. RIL alone accounted for a 210-point decline in the Sensex. HDFC Bank, which has the second-highest weight in the benchmark indices, ended 0.4 per cent lower at Rs 1,055. The stock hit an intra-day high of Rs 1,079.

 

Both domestic as well as foreign portfolio investors (FPIs) were net sellers on Wednesday. The former sold shares worth nearly Rs 800 crore, while FPIs yanked out Rs 221 crore.

"Global cues were also positive, after results from experimental vaccine trials progressed as expected. This optimism offset growing concerns regarding increasing infections and also regarding the US-China tensions. Investors need to be prepared for volatility as the market is showing signs of weariness and are advised to be cautious,” said Vinod Nair, head of research, Geojit Financial Services.

Experts said the market could have run into technical resistance.”The Nifty has been facing resistance in breaking through its 200-day moving average at 10,850. A contributing factor to this weakness has been a break of uptrend in the Bank Nifty,” said S Hariharan, head, sales trading, Emkay Global Financial Services.

The top four Sensex gainers were IT stocks, led by Infosys , HCL Tech, TCS, and Tech Mahindra . Wipro, which is part of the Nifty, skyrocketed 17 per cent.