Stock Market

Sensex, Nifty snap 2-day fall; Mid & Smallcap shine, PSU Bank zooms


Chillicious Bureau

Equity benchmarks managed to close in green amid consolidation on Wednesday after losing over 2 percent in previous two consecutive sessions. Weak factory data for July and Asian cues dampened the market sentiment initially but hopes of rate cut post easing retail inflation to 5.05 percent (from 6.07 percent MoM) and recovery in Europe capped the downside in late trade.

The 30-share BSE Sensex was up 18.69 points at 28,372.23 and the 50-share NSE Nifty gained 11 points at 8726.60.

The broader markets outperformed smartly with the BSE Midcap and Smallcap indices rising over 1.2 percent each on positive breadth. About 1753 shares advanced against 950 declining shares on the exchange.

Experts say despite recent correction on FIIs outflow and weak global cues, they remained positive on the market.

The market has rallied around 30 percent in the last six months, so a few percentage point correction should not be worrying, Harsha Upadhyaya of Kotak Mutual Fund said, adding investors looking to put money into equity should be ready to bear intermittent volatility.

The fundamentals of the Indian markets have turned positive in the past few quarters and this momentum is likely to continue, he feels.

Meanwhile, WPI inflation in August increased to 3.74 percent from 3.55 percent in July.

Banking stocks contributed the most to benchmark indices recovery. Nifty PSU Bank index was the biggest gainer among sectoral indices, rising 2.6 percent. SBI, Bank of Baroda, PNB and Canara Bank gained 2-5 percent.

Coal India declined 2 percent after reporting a 15 percent degrowth in Q1 profit and 6 percent in revenue on yearly basis. However, Jefferies advised buying the stock with a target price of Rs 330 per share after quarterly earnings.

Tata Steel recouped losses to close flat. Its Q1 net loss widened 10-fold but operational performance was very strong. Credit Suisse has maintained outperform rating on the stock with unchanged target price of Rs 440 per share post strong Q1 performance as UK business turned profitable after sale of Scunthorpe. It raised FY18-19 EBITDA estimates by 9-13 percent and said at USD 790 per tonne of enterprise value looks reasonable.

Yes Bank rebounded 4 percent after losing 16.3 percent in previous four consecutive sessions due to company deferred its USD 1 billion QIP issue.

Tata Motors, Axis Bank, ICICI Bank, Adani Ports, Hero Motocorp, NTPC and Cipla gained 1-2 percent. However, TCS, HDFC Bank, Infosys, HUL, HDFC and Sun Pharma were losers.

Reliance Capital was the top gainer among midcap as well as F&O stocks, up nearly 9 percent after the board of directors approved plan to independently list home finance business on stock exchanges.

Jain Irrigation was another top F&O gainer whereas Castrol and Just Dial were top losers.

Gitanjali Gems shot up 20 percent while Metalyst Forgings, Godfrey Phillips and Amtek Auto lost 2.5-8 percent after quarterly earnings.

Globally, European stocks were higher, shrugging off market jitters over central bank uncertainty and a renewed drop in oil prices. Germany’s DAX and Britain’s FTSE gained 0.4-0.6 percent, at the time of writing this article. Asia ended mostly lower following negative lead from the US. Oil prices also rebounded after falling by as much as 3 percent in the previous session.