IT stocks weigh on Nifty 50 while financials recover; Sensex drops below 82,000 points

The domestic IT stocks weighed heavily on domestic benchmark indices, falling 0.7%, whereas a last-hour recovery in financial stocks saw the Nifty 50 and Sensex come slightly off lows after extending early losses on Monday.

Indices had fallen as much as 0.5% earlier in the day, but recovered some losses as some banking stocks came off their intraday lows. However, they remained lower as losses in information technology stocks continued to weigh on the market. As a result, indices started the week with losses after four consecutive weeks of rising.

The Nifty 50 lost 0.4% to end at 24,668.25 . The Sensex closed 0.5% lower to reach 81,748.57.

Shares of Oberoi Realty Ltd. were among the top gainers among Real Estate stocks after the Mumbai-based developer was upgraded to “buy” by brokerage firm Avendus Spark.

Wockhardt gained as much as of 10% after the company announced the successful use of its drug Zaynich (WCK 5222) in a patient suffering from cancer in the US.

Investors were likely cautious ahead of the US Federal Reserve’s policy meeting Wednesday, where a rate cut of 25 basis points is widely expected. A 25-basis-point rate reduction is almost certain this week, with the odds at 97%, according to the CME FedWatch tool. If the policy outcome comes in line with market expectations, the market could go up, though not very sharply, Onkar Kelji, research analyst at IndSec Securities, told Cogencis Information.

The rate cut will also expected to bolster the domestic information technology and banking stocks.

Investors also digested the easing of the domestic wholesale price index inflation (WPI) because of a sequential fall in food prices and primary articles. India’s WPI eased to a three-month low of 1.89% in November, driven by a significant fall in food and vegetable prices, according to data released by the Ministry of Commerce and Industry on Monday. This is a decline from 2.36% in October and a sharp contrast to 0.39% recorded in November last year.