Midcap outperforms equity benchmarks; Sensex gains 107 pts amid North Korea fears
Equity benchmarks recouped more than half of previous day’s losses and the broader markets outperformed on Tuesday as investors shrugged off lingering geopolitical tensions and preferred bargain hunting.
The late rally helped the 30-share BSE Sensex gain 107.30 points at 31,809.55. The 50-share NSE Nifty rose 39.35 points to 9,952.20, driven by oil, private banking & financials and cement stocks.
Experts expect the market to be rangebound in near term as they feel it is difficult for the Nifty to surpass 10,000 level in near term due to global factors like North Korea tensions. However, they are positive for long term.
“There does not seem to be any headwinds for the Indian macros – so till elections in May 2019. There is time for earnings to catch up and even if they do not catch up, the flows are strong,” Nimesh Shah of ICICI Prudential AMC said in an interview to CNBC-TV18. FY19 is expected to be good for earnings, he added.
The BSE Midcap index was up 0.6 percent and Smallcap index gained 1 percent on strong market breadth. About two shares advanced for every share falling on the BSE.
Meanwhile, activity in services sector contracted for a second straight month in August due to GST-led disruptions. Nikkei/IHS Markit Services Purchasing Managers’ Index rose to 47.5 in August, up from 45.9 in July but still below the 50 mark that separates expansion from contraction.
All sectoral indices barring Pharma closed in green.
Reliance Industries continued its upmove for fifth consecutive session today, contributing most to index gains. The stock was up 1.3 percent and rallied 6.6 percent in five sessions.
Tata Motors gained 1.2 percent despite decline in JLR UK sales. Jaguar Land Rover sales dropped 9.5 percent year-on-year to 2,077 units in August.
All Nifty Bank stocks barring SBI ended higher today. The upgrade of European banks by UBS and bargain hunting could be reasons for upside. Kotak Mahindra Bank, HDFC Bank, IndusInd Bank, Yes Bank, Axis Bank and ICICI Bank gained 0.2-1 percent while HDFC was up 0.7 percent.
Cement stocks like UltraTech Cement, ACC, Ambuja Cements etc gained around 2 percent after hike in cement prices. Cement makers raised prices by up to Rs 27 per 50 kg bag in Mumbai, reports CNBC-TV18.
Tech Mahindra gained 2.8 percent and IOC was up 0.7 percent after falling 2 percent and 4 percent in previous session, respectively.
Coal India added another 3 percent gains today, on top of 3 percent rally in previous session post good production & offtake numbers.
Telecom stocks ended lower as sources told CNBC-TV18 that telecom regulator TRAI is going to set a 1-2 year roadmap to gradually phase out interconnect usage charge (IUC) that is currently at 14 paise.
Telecom commission, which is in favour of zero IUC regime, has recommended immediate cut in IUC to 7-8 paise, sources said. Bharti Airtel and Idea Cellular fell 2-3 percent.
Sun Pharma erased some previous day’s gains, losing 1.8 percent on profit booking.
On the global front, European markets were moderately higher despite geopolitical concerns. France’s CAC, Germany’s DAX and Britain’s FTSE were up 0.2-0.5 percent at the time of writing this article. Asian markets ended mixed despite positive Caixin services PMI.
