NEW DELHI: Stock market bulls made a valiant effort during the day, wiping almost all of the losses but failed to help the bluechip indices close in the green on Wednesday.Launch of the first Covid-19 vaccine in Russia, rebound in European markets and firm US stock futures boosted sentiments on Dalal Street but looming uncertainty on the stimulus package in the US kept investors on their toes, which resulted in a choppy trade.
The 30-share pack Sensex dropped 37 points to 38,370, snapping its four-day rally. Kotak Mahindra Bank, TCS and Reliance Industries were the top drags on index.
NSE barometer Nifty fell 14 points to 11,308, breaking a six-day streak. India VIX, a measure of volatility, dropped for the seventh day to 20.89, providing some relief to traders.
“Indian benchmark indices closed out a volatile day, flat, with a negative bias. Global cues added to the uncertainty with doubts emerging about the expected US stimulus measures and continuing US-China tensions. Profit booking continued in the pharma sector,” said Vinod Nair, Head of Research at Geojit Financial Services.
He added that markets are reacting uncertainly to global cues and this uncertainty is expected to continue.
In the 30-pack Sensex, HCL Tech was the biggest gainer, up 4.75 per cent at Rs 716, followed by SBI, Tech Mahindra, Maruti Suzuki and Power Grid that rose in the range of 1-4 per cent. On the other hand, Kotak Mahindra Bank was the top loser, down 2 per cent, followed by Sun Pharma, Bajaj Finserv and L&T.
Broader market indices, however, continued their outperformance. Nifty Smallcap extended gains to the ninth straight day, advancing 0.41 per cent. Eros Media, IDCI, Punjab Chemicals and Rupa Company were top gainers in the space, rising 16-20 per cent.
Nifty Midcap also came back from deep in the red to end with marginal gains. The index edged 0.07 per cent higher, thanks to up to 5 per cent gains in defence firms Bharat Forge, Bharat Electronics and restaurant chain Indian Hotels. Meanwhile, Crompton, Mphasis and Prestige Real Estates were among top losers.
Banking index has been under focus for a while now, and the Nifty Bank rose for the seventh day, thanks to gains in large PSU banks. SBI, PNB and Bank of Baroda advanced in the range of 2-5 per cent.“The encouraging response to the fundraising by the lending firms has boosted the investors’ sentiment towards the banking stocks, which in turn helping the benchmark to sustain at the higher levels while other sectors are taking a breather after a substantial rally,” said Ajit Mishra, VP – Research, Religare Broking.
Pharma and metal names saw profit booking after a rapid rise in stock prices. Nifty Metal snapped an eight-day rally and slid 0.67 per cent at the end of the day. Nifty Pharma slipped more than a per cent for the second day in a row.
Overall, 1,500 stocks closed the day in the green while 1,223 names ended the day in the red. Over 150 stocks hit 52-week highs that included mostly small and microcap stocks. Over 400 stocks hit the upper circuit during the day.
Shares were mostly lower in Asia after Wall Street pumped the brakes on its rally while Europe’s stock markets held their own. Bank shares rallied and bond yields climbed globally. UK gross domestic product plunged 20.4% in the second quarter.
“Investor sentiments were dampened by the deadlock in the US Congress over the latest COVID-19 stimulus measures, with Senate Majority Leader Mitch McConnell saying that talks are at a stalemate,” said Deepak Jasani, Head Retail Research, HDFC Securities.
Let’s prepare for tomorrow
- Further developments on the stimulus package announcement and US-China trade tension would be actively tracked by the participants for cues, said Mishra of Religare. He suggested traders should maintain their focus on the selection of stocks as there are still enough opportunities across the board.
- Q1 earnings: Balkrishna Industries, Bharat Petroleum, Eicher Motors, GAIL, Hero Moto, Prestige Estates and Tata Steel are some of the major companies scheduled to present their June quarter numbers on Thursday.
- Nifty weekly contracts will also expire tomorrow, so there could be some volatility in the market.
Source: ET Markets