Markets extend correction from life-time peaks

MUMBAI: Equity benchmark indices declined in early trade on Monday, extending corrections from their life-time peaks for the second consecutive session, dragged down by index heavyweight Reliance Industries after the company missed street estimates due to weak performance in oil-to-chemicals (O2C) business.

Foreign fund outflows and crude oil prices hovering above $80 per barrel also weighed on equity markets as traders were awaiting the US Federal Reserve’s monetary policy decision to be announced this week.
The 30-share BSE Sensex declined 87.24 points or 0.13 to 66,597.02. The broader NSE Nifty fell 10.65 points or 0.05 per cent to 19,734.35.

From the Sensex pack, Kotak Mahindra tanked more than 3 per cent and Reliance tumbled close to 2 per cent in the initial trade.
“RIL Q1 Results misses street estimates due to weak performance in oil-to-chemicals (O2C) business on account of a sharp reduction in crude oil prices and lower price realisation of downstream products,” said Prashanth Tapse, Sr VP Research analyst at Mehta equities Ltd.
JSW Steel, Tata Steel and Tech Mahindra were other laggards.
On the other hand, Mahindra & Mahindra and Larsen & Toubro gained more than 1 per cent. IndusInd Bank, Axis Bank and Tata Motors were among other gainers.
Of the 30 stocks, 18 were trading in green while on the 50-stock index Nifty, 27 were in positive territory.
“The near-term market trend will be influenced by a host of factors like the recent Q1 results, some major results expected this week and policy decisions like the Fed meeting outcome on Wednesday,” V K Vijayakumar, Chief Investment Strategist at Geojit Financial Services, said in his market outlook.
Vijayakumar further noted that the Fed is likely to raise the rate by 25 bp on Wednesday, but the market movement will be decided by the commentary of the Fed chief regarding future inflation and rate trends. Investors may wait and watch these events unfold.
On Friday, both the indices settled more than 1 per cent lower in the previous session, snapping their six-day record-breaking rally. The BSE benchmark tumbled 887.64 points or or 1.31 per cent to settle at 66,684.26 on Friday. NSE Nifty fell by 234.15 points or 1.17 per cent to end at 19,745.
In Asian markets, Nikkei 225 was up 1.38 per cent, while the stock markets in Hong Kong and Shanghai were not trading.
The US markets ended broadly higher on Friday.
Global oil benchmark Brent crude was trading 0.14 per cent lower at $ 80.96 a barrel.
Foreign Institutional Investors (FIIs) were sellers on Friday as they sold equities worth Rs 1,998.77 crore, according to exchange data.