Sensex, Nifty open lower tracking weaker financial stocks; Bajaj Finance falls

Benchmark stock market indices opened lower on Thursday, dragged down by shares of financial companies.

The S&P BSE Sensex was down 134.68 points at 65,541.25 at 9:25 am, while the NSE Nifty 50 fell 37.50 points to 19,637.95. The broader market indices were mixed, signalling an increase in volatility.

It may be noted that both the benchmark indices, Sensex and Nifty, gained over 1 per cent in yesterday’s trading session, supported by a decline in domestic and US inflation. This helped them register their best closing in nearly a month.

Sectoral indices were also mixed in early trade, with Nifty Financial Services falling nearly 0.3 per cent. Nifty Bank was also trading marginally in negative territory. Nifty Oil & Gas and Nifty Auto were the only two prominent indices that registered decent gains.

The top five gainers on the Nifty 50 were NTPC, ONGC, BPCL, Coal India and Hero MotoCorp. On the other hand, the top losers were Bajaj Finance, Bajaj Finserv, Hindalco, Grasim and JSW Steel.

Bajaj Finance shares fell sharply by 3 per cent in early trade after the Reserve Bank of India directed it to immediately stop lending via two products – ‘eCOM’ and ‘Insta EMI Card’. Bajaj Finserv shares also fell over 1 per cent as a result. The Bajaj twins were the top losers on the Nifty 50.

“We wish to submit that Key Fact Statement (‘KFS’) are being issued for the loans booked under the above mentioned two lending products,” Bajaj Finance said in a stock exchange filing.

“However, based on the supervisory concerns raised by the RBI, we will undertake a detailed review of the KFS and implement requisite corrective actions to the satisfaction of the RBI at the earliest,” it added.

However, according to analysts, domestic markets are likely to gain momentum despite the weak opening.

Ahead of the market opening, Aditya Gaggar, Director of Progressive Shares, said, “On the daily chart, the Index has made a long-legged DOJI candlestick pattern and not only breached its falling trendline but also gave a convincing close above its 50DMA (19,580) which shows bullishness in the markets.”

“Now the next critical hurdle for the Index stands at 19,840 while the downside is protected at a strong support zone of 19,550-19,580,” he added.

Meanwhile, Mandar Bhojane, research analyst at Choice Broking said, “Analyzing the daily chart, Nifty displayed a gap-up opening, followed by a sustained upward movement, forming a hammer candlestick pattern with substantial volume.”

“This pattern signals a bullish momentum in the index. Presently, the 19,500 level serves as immediate support for Nifty. On the higher side, resistance levels are identified at 19,850 and 19,900,” Bhojane added.