By Bharath Rajeswaran and Archishma Iyer
BENGALURU (Reuters) -India’s Nifty 50 index dipped in volatile trading on Tuesday as investors booked profits after the blue-chip index hit a record high near the open.
The Nifty 50 was down 0.05% at 19,987.85 by 1:36 p.m. IST, while the S&P BSE Sensex rose 0.08% to 67,129.68. Both indexes opened higher, with the Sensex just shy of its own all-time high, before the selling pressure emerged.
The volatility index rose to 12.02, the highest since Aug. 31. It had spiked on Monday as well when the Nifty hit a record high late in the day.
“The profit-booking seen today at near record highs was just a matter of time due to stretched valuations,” said Narendra Solanki, head of fundamental research at Anand Rathi Shares and Stock Brokers.
He expects the consolidation to continue for the next few sessions.
The more domestically focussed small-caps and mid-caps fell 4.1% and 3%, respectively, in contrast with their recent outperformance.
“Earnings in small- and mid-caps have to catch up to their lofty valuations to justify further rally,” said Solanki, echoing Kotak Institutional Equities’ concerns.
Oil and gas stocks lost 2.5% on the day as crude oil prices held above $90 a barrel. [O/R]
Bharat Petroleum, Hindustan Petroleum and Indian Oil fell more than 4% each.
IT stocks rose 0.7% following the tech-led rally on Wall Street overnight. Larsen & Toubro jumped 4% to a record high after raising its buyback price.
India’s retail inflation data for August is due after the close, with economists estimating inflation eased to 7% from a 15-month high in July.
(Reporting by Bharath Rajeswaran and Archishma Iyer in Bengaluru; Editing by Dhanya Ann Thoppil, Janane Venkatraman and Sonia Cheema)
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