Chinese regulatory moves cast shadow over markets

Mumbai: Domestic markets surrendered early gains to close in the red for the second straight session on Tuesday as sentiment remained risk-averse amid lacklustre corporate earnings and a deepening sell-off in Asian markets post-China's regulatory crackdown on tech companies.

The 30-share BSE Sensex skidded 273.51 points or 0.52 per cent to finish at 52,578.76, while the broader NSE Nifty fell 78 points or 0.49 per cent to 15,746.45. Dr Reddy's was the top loser among the BSE Sensex constituents, plunging 10.44 per cent, after the company reported a 36 per cent decline in consolidated net profit at Rs 380.4 crore for the quarter ended June 30, 2021, on account of higher expenses.

"Stocks gave up gains as investors were nervous on the selling across Chinese markets by global funds coupled with the policies of the Chinese authorities and the likely impact on Indian markets despite knowing that it is also a positive for India. While we did see profit booking across banks and the pharma pack on account of negative news flow on few pharma names, certain pockets across the broader market like textile exporters and coffee stocks posted smart gains on the back of rising coffee futures," said S Ranganathan, head (research) at LKP Securities.

Vinod Nair, head (research) at Geojit Financial Services, said: "Domestic market skewed in favour of the bears, failing to hold onto its early gains due to weak global cues and selling in pharma stocks. Bleeding pharma companies pulled down the market due to a weak start to sector earnings season. It created panic as the sector is priced with high expectations."