Equities clock gains for third straight session; rise in markets capped by profit booking

Both the Nifty and Sensex have underperformed so far in August.

Equities clocked gains for the third straight session on Wednesday, thanks to the rally in the broader markets, which outperformed the benchmarks. The Sensex was up by 86.47 points, or 0.22%, to close at 38,614.79, whereas the Nifty was up by 23.05 points, or 0.2%, to close at 11,408.4. Gains were capped by profit booking in the last hour of the session.

Both the Nifty and Sensex have underperformed so far in August, when compared to the broader indices. In this month, the Nifty has risen 4.7% whereas the Nifty Midcap 100 has risen by 8.3%.

Deepak Jasani, head – retail research, HDFC Securities, said: “The movement in large cap is limited because the institutional activity is quite low in the last few sessions which is evident in the futures and options as well as cash turnover. Looking at this, local traders have taken this as an opportunity to make merry given that there is no large negative trigger in near term, and ramped up prices of certain stocks that have had good results or have seen positive developments. The midcaps don’t require much money as much as large caps to see strong up moves, and so in the last few sessions, the benchmarks have not performed as much due to lower institutional activity.”

The benchmarks also were up on stock-specific moves, with Zee Entertainment making major gains after a decent Q1 performance. Foreign portfolio investors, too, have been strong buyers this month pumping in $5.3 billion till August 19.

On Tuesday, FPIs bought stocks worth $149.2 million whereas domestic institutional investors (DII) sold stocks worth $49.9 million.

According to a report by Motilal Oswal Institutional Equities, DII holding in Nifty 500 stocks is at a five-year high. “FII holdings in the Nifty-500 remained near five-year lows in Q1 fiscal year 2021 – it increased by 8 basis points (bp) quarter on quarter (QoQ), but declined 130 bp year on year (YoY) to 20.8%. DII holdings were marginally up in the Nifty-500 by 7bp QoQ or 90bp YoY to 14.7%.”

The futures and options segment saw a turnover worth Rs 15.8 lakh crore, against the six-month average of Rs 14.9 lakh crore.

Major gainers on the Nifty were Zee Entertainment, GAIL, Tech Mahindra, Bharti Airtel and Maruti Suzuki, which were up by 14.06%, 5%, 2.24%, 1.84%, and 1.54%. Significant losers were Bajaj Auto, ONGC, Nestle India, Kotak Mahindra Bank and Britannia Industries, down by 1.2%, 1.18%, 1.12%, 1.11% and 0.98%.