Stock markets extend gains on fag-end buying

Mumbai: The benchmark equity indices, Sensex and Nifty, rebounded from early losses to close higher for the second consecutive session on Wednesday. This rise was supported by late buying in major index companies like Infosys, L&T, and M&M, despite a mixed trend in global markets. In a volatile trading session, the 30-share BSE Sensex gained 137.50 points or 0.21 per cent, closing at 65,539.42. Throughout the day, it had dropped by 369.03 points or 0.56 per cent to 65,032.89. The NSE Nifty closed with a gain of 30.45 points or 0.16 per cent at 19,465.

Vinod Nair, Head of Research at Geojit Financial Services, mentioned, "The initial apprehension due to higher-than-expected domestic CPI inflation, driven by increased food prices, caused volatility in the Indian market. However, relief came as the belief that this inflation surge would be temporary alleviated concerns, leading to a recovery later in the trading session."

Among the major gainers in the Sensex, UltraTech Cement led with a rise of 2.43 per cent, followed by NTPC, Tata Motors, Infosys, Power Grid, Mahindra & Mahindra, Larsen & Toubro, Maruti, Wipro, and SBI. On the other hand, Tata Steel, Bharti Airtel, Bajaj Finserv, Axis Bank, Bajaj Finance, and JSW Steel were among the decliners.

In the broader market, the BSE smallcap index climbed by 0.52 per cent, and the midcap index advanced by 0.25 per cent. Shrikant Chouhan, Head of Research (Retail) at Kotak Securities Ltd, noted, "While volatility remained a consistent theme, the markets rebounded in late trades due to buying in IT, realty, and power stocks. However, concerns about weakening demand in China affecting sentiment in the future caused metals to decline."

Various sectors performed differently, with utilities gaining 1.14 per cent, realty rising by 1.08 per cent, power by 1.03 per cent, industrials by 0.82 per cent, healthcare by 0.80 per cent, capital goods by 0.63 per cent, and auto by 0.63 per cent. Conversely, commodities, financial services, telecommunications, bankex, and metal sectors experienced declines.

Siddhartha Khemka, Head - Retail Research at Motilal Oswal Financial Services Ltd, highlighted, "The domestic equity market began weak but saw a strong recovery towards the end due to a drop in UK inflation and short covering ahead of the FOMC meeting minutes release and US IIP data. Weak global cues, especially the Chinese economy's instability and Fitch's warning of downgrading US midsized banks, have put pressure on the market."

While Asian markets like Seoul, Tokyo, Shanghai, and Hong Kong ended in negative territory, European markets were mostly trading positively. The US markets had closed lower on the previous day. The global oil benchmark, Brent crude, saw a slight increase of 0.01 per cent to reach $84.90 per barrel.

Foreign Institutional Investors (FIIs) had sold equities worth Rs 2,324.23 crore on the previous Monday. The equity markets were closed on Tuesday due to 'Independence Day'. Siddhartha Khemka also commented, "Sharp inflation data surge and weak progress in monsoon during August 2023 have impacted investor sentiment on the domestic front. We anticipate this market weakness to continue in the near term unless positive triggers emerge."