Why did Dalal Street lose early gains? Here's what dragged markets lower

The equity benchmark indices BSE Sensex and NSE Nifty ended mixed on Wednesday (June 10), with the market giving up early gains amid weakness in IT, metals and heavyweight stocks.

The Sensex rose 64 points to close at 73,983, while the Nifty fell 27 points to settle at 23,215 after slipping below the 23,250 level during the session.

IT Stocks Extended Losses

The Nifty IT index ended lower for the sixth straight session, with all constituents closing lower except Tata Consultancy Services. Infosys was among the top drags on the benchmark indices, pulling the Nifty below the 23,250 mark.

Heavyweights And Midcaps Weighed On Markets

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and Indian Bank added pressure on benchmarks. Broader markets underperformed sharply, with the Midcap index falling 905 points to 59,810. The NSE advance-decline ratio stood at 1:3.

Siddhartha Khemka, Head of Research, Wealth Management, Motilal Oswal Financial Services Ltd, on Oil India and ONGC, "I think definitely, based on these geopolitical issues, if the crude price comes down, that is a big negative for some of these oil companies.

But if you look at it structurally, what we see is that the upstream oil companies are in an upcycle, given the increasing production capacities that they are adding, and also the new gas find that Oil India reported recently. If you look at it in that sense, while the short term may be a bit impacted because of the fall in global prices whenever this war stops, overall, we believe there is slow and steady growth.

Specifically, for Oil India, we are looking at about a 2% to 4% oil and gas production CAGR over the next two years. I think on falls, one can look at them incrementally, but currently the sentiment is definitely a bit on the negative side."

Stock-Specific Declines Added Pressure

NLC India dropped more than 10% after Morgan Stanley downgraded the stock to “underweight” from “overweight”. Nestle India fell 5%, and Nestle India declined 2% as gold prices slipped. Newgen Software also fell over 3% after the resignation of its chief executive officer.

Oil India, Nestle India, Kalyan Jewellers and

Indian Bank emerged among the top losers in the midcap segment. On the sectoral front, the Nifty FMCG index emerged as the top-gaining sectoral index, led by a 2% rise in Nestle India.

From the Sensex basket, Nestle India Ltd, Hindustan Unilever Ltd, Axis Bank Ltd, Kotak Mahindra Bank Ltd, ICICI Bank Ltd and ITC Ltd were the major gainers. Hindalco Industries Ltd, Coal India Ltd, Oil And Natural Gas Corporation Ltd, Eternal Ltd, Tata Steel Ltd and Tata Motors Passenger Vehicles Ltd were the biggest laggards.