Midcap outperforms Sensex, Nifty closes flat; NALCO, Bajaj Finance shares rally
The market ended rangebound session on a flat note after it failed to hold on to opening gains, but the broader markets outperformed since the beginning of trade Thursday.
Equity benchmarks started off trade with more than 150 points gains on the Sensex, tracking positive global cues after President Donald Trump’s support to a package that included a short-term debt ceiling extension. But indices erased gains as the day progressed, due to selling pressure in ITC, ICICI Bank and Reliance Industries.
The 30-share BSE Sensex was up 0.77 points at 31,662.74 and the 50-share NSE Nifty gained 13.70 points at 9,929.90.
Experts expect the consolidation to continue for a while and the Nifty to remain in range of 9,700-10,000. They feel investors will closely watch developments (if any) in North Korea after recent hydrogen bomb test but on top of it, all eyes are on FOMC meeting later this month.
FIIs have been sellers since August but domestic institutional investors continued to pour in money Indian equities that is major reason why market has not been seeing sharp correction.
“We remain of the view that India is in the midst of domestic liquidity supercycle,” Morgan Stanley said in its report.
Rakesh Tarway – Research Head – Reliance Securities said the market is already discounting a good earnings cycle in FY18 and any let up in the same will lead to a correction in the equity markets.
The BSE Midcap index rose 0.8 percent and Smallcap gained 0.5 percent. The market breadth ended positive but the gap between advances and declines narrowed in last hour of trade. About 1,396 shares advanced against 1,175 declining shares on the BSE.
On the global front, European markets were higher as investors awaited the European Central Bank’s monetary policy decision later today. France’s CAC, Germany’s DAX and Britain’s FTSE were up 0.4-1 percent at the time of writing this article. Asian markets ended mixed.
Back home, Nifty Bank closed mildly in the green on weekly expiry day. HDFC Bank, Axis Bank, Yes Bank and Bank of Baroda gained 0.3-0.9 percent. However, ICICI Bank lost nearly a percent on profit booking. It gained over a percent after ICICI Lombard General Insurance IPO opening date announced.
ITC continued its downtrend for fourth consecutive session today, falling 2 percent. The stock lost more than 4 percent in 4 sessions after analysts downgraded the stock and cut target price due to low cigarette volumes.
Reliance Industries shed 0.6 percent on profit booking. The stock had rallied more than 7 percent in previous six straight sessions ahead of today’s ex-bonus.
Indiabulls Housing Finance was biggest gainer among Nifty 50 stocks, up more than 4 percent after CLSA hiked target price to Rs 1,500 from Rs 1,380 earlier.
Eicher Motors shares rose 2.4 percent on a media report that the company is in race to buy Italian-based superbike major Ducati for USD 1.8 billion-2 billion.
Bajaj Finance continued its upmove, rallying 5.4 percent post fund raising that was close to Rs 4,500 crore. The stock shot up 133 percent in current calendar year.
Nalco shares surged 12 percent as alumina prices moved 15 percent higher in 2 weeks. Hindalco Industries also gained 1.7 percent and Vedanta was up 2.7 percent.
Bharat Forge advanced 2 percent on sharp increase in North America class 8 truck orders in August. BEML gained 2 percent after Bharat Forge CMD, Baba Kalyani said they would be interested in buying stake in company.
Cadila Healthcare soared 3.4 percent on zero observations from USFDA for Moraiya facility after re-inspection.
Disclosure: Reliance Industries Ltd. is the sole beneficiary of Independent Media Trust which controls Network18 Media & Investments Ltd.
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