Financial stocks witnessed a turn of tide and ended on a strong note, while metal and pharma names were on the losing side.
Driven by gains in index heavyweights such as ITC and Tata Consultancy Services (TCS), coupled with a rise in financials, the market on Wednesday ended on a strong note. The Sensex ended over around 140 points higher, while the Nifty ended just three points below 10,400.
The Street began on a gap-up note, with the Sensex gaining over 180-odd points, while the Nifty too reclaimed 10,400. But selling pressure was visible in the first couple of hours as indices swung in a tight range around the flatline. But a recovery in financials, PSU banks and private banks, helped the market push up higher.
In the broader market, midcaps erased most of its losses and ended flat. Meanwhile, gains were visible in IT names along with Nifty Bank and Nifty PSU bank. Metals and pharmaceuticals were the top losers among these, falling 1-2 percent.
"The sentiment was weak across the globe as well with the US market exercising caution ahead of the release of the US Federal Reserve’s minutes of its last monetary policy meeting. Asian and European equity market also saw mixed trends. Though the market is expected to see near-term volatility, domestic investors seem to be optimistic on the Indian economy’s long-term growth potential and have been buying steadily since the start of the year," Karthikraj Lakshmanan, Senior Fund Manager – Equities, BNP Paribas Mutual Fund said in a statement.
The Sensex closed higher by 141.27 points or 0.42% at 33844.86, while the Nifty was up 37.10 points or 0.36% at 10397.50. The market breadth was negative as 1122 shares advanced, against a decline of 1584 shares, while 212 shares are unchanged.
TCS, HCL Tech, Tech Mahindra and ITC were the top gainers, while Sun Pharma, IndusInd Bank, and Hindalco lost the most.
Among commodities, gold tumbled by Rs 250 to Rs 31,450 per ten gram at the bullion market today in tandem with a weakening global trend amid easing demand from local jewellers.
Silver followed suit and slipped by Rs 140 to Rs 39,300 per kg on reduced offtake by industrial units and coin makers.
Traders said gold prices took a hit owing to a weak global trend as the dollar remained firm, while investors awaited the minutes of the US Fed's last policy meeting.
Globally, gold fell 0.21 per cent to USD 1,325.90 an ounce and silver by 0.18 per cent to USD 16.39 an ounce in Singapore today.
Besides, easing demand from local jewellers and retailers at domestic spot market weighed on gold prices. In the national capital, gold of 99.9 per cent and 99.5 percent purity plunged by Rs 250 each to Rs 31,450 and Rs 31,300 per ten gram, respectively.
There was a lot of stock-specific action visible as well. Shares of media firm Eros International Media Limited jumped 5 percent after Reliance Industries Ltd (RIL) on Tuesday said it will buy a 5 percent stake in NYSE listed Eros International Plc (Eros) through a subsidiary.
Biocon recovered from the day’s low points, which saw the stock falling 3 percent intraday as investors reacted to the news of six observations for its unit. The biotechnology major said the US health regulator has made six observations after inspecting its Malaysia manufacturing facility. But value buying in the final hour ensured that the stock ended around 2 percent higher.
Ambuja Cements were up over 2 percent intraday before ending one percent lower after investors reacted to the December quarter performance of the company. The company’s Q4CY17 beat analyst expectations as standalone net profit growth of 88.8 percent year-on-year at Rs 338 crore was far ahead of CNBC-TV18 poll estimates of Rs 251 crore.
Shares of Coal India lost around 2 percent intraday before ending flat after the government on Tuesday allowed private sector to mine coal and sell it for commercial use. The move ended state-owned CIL's monopoly in a bid to cut imports by raising domestic output.
Meanwhile, IT names such as TCS, Infosys, HCL Tech and Tech Mahindra, all major IT names, ended 3-4 percent higher. On the downside, metal stocks fell on the back of weak global metal prices. Hindalco and Tata Steel were index losers and fell around 1-2 percent.
Going forward, experts believe that the market could remain rangebound, especially Thursday being the expiry for February F&O contracts.
“We expect the Indian equities to remain range bound in the coming sessions. Domestic macro data and global developments will dictate the further course of the market in the near term. Valuations at current levels are not very cheap and India continues to trade at a premium to the other emerging markets. Hence, for this premium to sustain, continued reform implementation and revival in the corporate earnings is essential. Investors should continue to focus on quality stocks on dips. However, considering the near term uncertainty, traders should avoid over leveraging,” Jayant Manglik, President, Religare Broking said in a statement.
