Sensex snaps record rally after India slips into overbought zone
August 10 2018 09:20 PM
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Bloomberg/Mumbai

India’s benchmark index fell, snapping a rally that’s sent Asia’s best performing stock market this year to new highs in 10 of the past 14 sessions while pushing it into a zone that some investors read as a sell signal.
The S&P BSE Sensex dropped 0.4% to 37,869.23 at the close in Mumbai, with 19 of its 31 constituents falling. The measure still eked out its third-straight weekly gain, adding 0.8%. 
Thirteen of the 19 sectoral sub-indexes compiled by BSE dropped, led by gauges of metalmakers and industrial companies. 
State Bank of India was the top loser on the main gauge after its quarterly results yesterday. Sun Pharmaceutical Industries and Vedanta were among other laggards on the main benchmark.
The Sensex’s 14-day relative strength index rose to 74.7 on Thursday, higher than the velocity measure’s oversold demarcation of 70. This indicator issues a sell signal when it breaches 70.
“Stocks are consolidating after the stellar rally and markets are catching their breath amid no significant cues,” Sageraj Bariya, vice president of institutional sales at East India Securities, said by e-mail. “Local earnings will be the only guide for investors looking ahead.”
So far, of the 44 NSE Nifty 50 companies that have announced results, 25 have either met or exceeded average analyst estimates. The Sensex has advanced 11% this year, holding its place as the best performing market in the Asia- Pacific region.
State Bank of India, the country’s largest lender by assets, posted a third straight quarterly loss as it set aside provisions against bad loans and losses on its holdings of government bonds. “Clearly the bond portfolio hit in one quarter and higher provision impacted SBI results,” said Abhimanyu Sofat, head of research at India Infoline.




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