Sensex, Nifty close rangebound session flat; Midcap falls after record high

The market closed flat on Friday amid volatility and weak global cues, as investors remained cautious due to geopolitical concerns. The Sensex started off trade with 100 points gains but gradually erased gains as the day progressed.

Banks, FMCG and metals stocks helped the market close with positive bias but the selling in pharma, PSU banks and select auto stocks capped upside.

The 30-share BSE Sensex was up 24.78 points at 31,687.52 and the 50-share NSE Nifty gained 4.90 points at 9,934.80.

“We expect markets to remain volatile amidst geopolitical tensions. Market will track the global cues closely,” Jayant Manglik, President, Retail Distribution, Religare Securities said.

Investors will closely watch cues from North Korea as after last Sunday’s hydrogen bomb test, lot of media reports indicated that Pyongyang may go for missile test on Saturday.

Manglik maintained cautiously optimistic view and advises to stick to fundamentally sound stocks on dips, as long term outlook remains bright.

Andrew Holland of Avendus Capital expects the Nifty to remain in range of 9,750-10,000 due to geopolitical tensions.

The Nifty Midcap index ended lower after hitting a fresh record high intraday, down 0.2 percent on weak market breadth. About three shares declined for every two shares rising on the NSE.

For the week, the Sensex lost 0.6 percent and the Nifty fell 0.4 percent but the Nifty Midcap Index gained 0.4 percent.

Global markets were under pressure as dollar fell sharply against the euro after the European Central Bank putting tapering on the table on Thursday. Japan’s Nikkei ended down 0.6 percent while France’s CAC and Britain’s FTSE were down nearly half a percent at the time of writing this article.

Back home, Larsen & Toubro rallied 3.8 percent after global brokerage house Citi raised target price of the stock to Rs 1,452 apiece from Rs 1,341 earlier. It is the top industrial pick with huge upside potential, it said.

Vedanta continued to gain today, up 1 percent and Tata Steel was up 0.4 percent but Hindalco Industries fell 0.2 percent on profit booking. The Nifty Metal index surged more than 6.5 percent in six consecutive sessions on rally in global metals prices.

JPMorgan has maintained its overweight rating on Vedanta and Hindalco; and raised its target price on them to Rs 350 per share (from Rs 310 earlier) and to Rs 270 (from Rs 255), respectively.

ITC shares rebounded 0.7 percent on short covering after a 4.5 percent loss in previous four consecutive sessions.

The Nifty Metal index rallied more than 6.5 percent in six consecutive sessions following the rally in global metals prices, which will be resulted into better earnings performance for the current quarter.

Mahindra & Mahindra lost 3 percent ahead of GST Council meet with respect to cess hike on SUVs and luxury cars on September 9.

Dr Reddy’s Labs shed nearly 3 percent after its Duvvada facility received six major observations from German health regulator. The Nifty Pharma index was down 1 percent as Sun Pharma also fell 2 percent and Lupin 0.9 percent.

The Nifty PSU Bank index also dropped 1 percent as major ones like SBI, PNB and Bank of Baroda were down 1-2 percent.

Among others, HDFC Bank, Kotak Mahindra Bank, Bharti Airtel and Tech Mahindra gained over a percent while Infosys, BPCL, Bajaj Auto and NTPC declined 1-2 percent.

Among midcaps, SREI Infra, Exide Industries, Indraprastha Gas, Kaveri Seed, Tata Sponge, Manappuram Finance, CDSL, Ashok Leyland, Cochin Shipyard, Future Consumer, Oil India, Arvind and Biocon rallied up to 6 percent.
HFCL, Bajaj Finance, Indo Count, HDIL, Glenmark Pharma, Just Dial, Indiabulls Real, Bharat Electronics, Sun TV Network fell up to 4 percent.