Market at record close but Nifty fails to hold 9800 on late profit taking; Midcap dips

Equity benchmarks managed to end at fresh record closing highs, though the profit-booking in the last hour of trade hit market sentiment that dragged the Nifty below 9,800 level on Tuesday.

Overall it was a volatile session. The market extended previous day’s momentum, with the Nifty crossing 9,800 level intraday for the first time and the Sensex surged 169 points but investors preferred profit booking in last hour of trade that forced the market to close moderately higher.

The 30-share BSE Sensex was up 31.45 points at 31,747.09 and the 50-share NSE Nifty gained 15 points at 9,786.05 after hitting intraday highs of 31,885.11 and 9,830.05, backed by further upmove in technology and auto stocks.

However, the broader markets underperformed benchmarks as the BSE Midcap index fell 0.8 percent on weak breadth. About 1,561 shares declined against 1,168 advancing shares on the exchange.

Experts expect consolidation with some profit booking in near term, especially after the market hit fresh record highs.

“We suggest continuing with the uptrend and avoid contrarian approach,” Jayant Manglik, President, Retail Distribution, Religare Securities said.

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All sectoral indices barring IT and Auto closed in red. Technology stocks contributed significantly in the last two sessions, though the result expectations from IT sector is subdued.

Infosys was up 1.75 percent and TCS gained 1.3 percent on further short covering but Wipro fell 2 percent.

Tata Motors gained 2.3 percent for the second consecutive session and was the second top contributor to Sensex’ gains as brokerage houses remained bullish on the stock.

While maintaining a buy call on the stock with target price of Rs 595 (implying 36 percent upside), Citi said it continued to be positive on Jaguar Land Rover primarily due to its strong product pipeline which should aid volumes as well as profits.

IndusInd Bank closed flat due to mixed performance in Q1 earnings. Profit and net interest income beat analysts’ estimates but asset quality deteriorated further.

South Indian Bank lost 4 percent as non-performing assets increased further in the quarter ended June 2017.

Among others, M&M, Bajaj Auto and NTPC gained around 2 percent each whereas ITC, Kotak Mahindra Bank, Bharti Airtel, ICICI Bank, ONGC and SBI fell 0.6-2.6 percent on profit booking.

In the broader space, Syndicate Bank, IDBI Bank, Allahabad Bank, Andhra Bank, Manappuram Finance, LIC Housing Finance, Reliance Capital, Jaypee Infratech, GMR Infra, IDFC, Shriram City, Shiram Transport and Religare Enterprises declined up to 20 percent.
However, HUDCO, CDSL, AU Small Finance, Bharat Gears and Prime Focus gained 4-14 percent.