Stocks slip as divestment drive fails to offset global woes; Tata Steel drops 3.35 pc

Equity indices slipped into the red on Thursday as the government's latest reforms push failed to stem profit-booking amid the protracted US-China tensions. After a choppy session, the 30-share BSE Sensex ended 76.47 points, or 0.19 percent, lower at 40,575.17. Similarly, the broader NSE Nifty closed 30.70 points, or 0.26 percent, down at 11,968.40.

Kicking off the country's biggest privatization drive, the Union Cabinet on Wednesday approved sale of the government's stake in five PSUs. The Centre also doled out a Rs 42,000 crore relief to debt-laden telecom companies after it agreed not to take any payments for the spectrum they use for the next two years. However, trading sentiment remained risk-averse after the US-China trade negotiations were further complicated by a US legislation supporting Hong Kong protestors.

Majority of the sectoral indices also succumbed to profit-booking amid elevated valuations, traders said. Tata Steel was the top loser in the Sensex pack, dropping 3.35 percent, followed by Bharti Airtel down 2.52 percent, Yes Bank 2.43 percent, ONGC 1.98 percent and ITC 1.96 percent.

On the other hand, HUL gained 1.15 percent, L&T 0.89 percent, Bajaj Auto 0.82 percent and SBI 0.81 percent. "Concerns over delay in US-China trade deal and Fed minutes fuelled negativity in markets across the globe. While domestic blue chips are finding it difficult to maintain positivity due to excessive valuation.

"Focus will be on next week's Q2 GDP data which is expected to be below the 5 percent reported in Q1. At the same time, Nifty50 is trading at one year forward P/E of 19x and 26x on 12 months trailing basis which does not provide much leeway to perform in the short-term," said Vinod Nair, Head of Research, Geojit Financial Services. Sectorally, BSE metal, oil and gas, telecom, energy, basic materials, consumer durables and auto indices tumbled up to 2.23 percent.

Realty, capital goods, finance, IT and tech notched up gains of up to 0.45 percent. Broader BSE midcap and smallcap indices slipped up to 0.73 percent.

Elsewhere in Asia, bourses in Shanghai, Hong Kong, Tokyo, and Seoul settled in the red amid reports that the US-China trade deal was unlikely to be signed this year. European equities were also trading on a negative note in their respective early deals.

Meanwhile, the Indian rupee appreciated marginally to 71.78 against the US dollar in intra-day trade. Brent crude futures, the global oil benchmark, slipped 0.51 percent to USD 62.08 per barrel.