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Sensex, Nifty end flat with marginal gains, mirroring Asian peers; financials drag indices


Shanghai Composite, Hang Seng, Nikkei 225, and KOSDAQ were all trading with losses. SGX Nifty too was trading over 55 points lower during the early hours of trade on Wednesday.

Domestic equity indices ended flat with a negative bias on Tuesday, adding marginal gains as it closed in the green for the ninth-consecutive day. S&P BSE Sensex closed 31.71 points or 0.08% higher while the Nifty 50 closed at 11,934 points. HCL Technologies was the top index gainer, zooming nearly 4% higher during the day, followed by Kotak Mahindra Bank, Infosys, and Reliance Industries. On the other hand, Titan and Sun Pharma were the worst performing Sensex constituents, falling over 2% lower. Kotak Mahindra Bank was the only banking stock on Sensex to end in the green. 

Nine-day rally: Share markets have now gained for the ninth consecutive day. During this S&P BSE Sensex has jumped 6.98% while the 50-stock Nifty has moved higher by 6.3%. 

Global watch: Asian peers started the day lower despite a surge in US stock markets. Shanghai Composite ended flat along with Sensex and Nifty. However, TOPIX and Nikkei 225 were slightly higher. Stock markets in South Korea ended in the red with both KOSPI and KOSDAQ finishing lower. 

Financials drag: Apart from Kotak Mahindra Bank, all other banking and finance stocks ended in the red. ICICI Bank was the top Sensex drags for the better part of the day as it closed nearly 2% lower. The Nifty PSU Bank index slipped 1.54%. Banking sector also lost some grounds due to adjournment of moratorium hearing.

Sectoral trends: Among Nifty sectoral indices, only IT and metal ended with gains, while all others slipped. Nifty Pharma, Nifty PSU Bank, and Nifty Media were the worst performers, falling over 1% each.

Outlook: Stock markets have ended largely flat for the second consecutive day. With the lack of stimulus, at home or abroad, analysts expect the positive momentum to fizzle out. “Market may consolidate due to the lower than anticipated stimulus package and the large part of the positive Q2 results announced till date is well factored in the prices. The momentum may reverse into a narrow-range, in the near-term, while the undercurrent of the rally is still positive and a break-up is likely based-on the continuity of positive results, more fiscal measures in the future  and developments in the global market,” said Vinod Nair, Head of Research at Geojit Financial Services.

Technical take: “The Index closed in the same flat manner in which it opened this morning. The markets moved in a tight 100 point range between 11880-11980. 11800 is good support for the Nifty and 12000-12050 is the short term resistance. When we get past those levels, we should be moving towards 12200-12300 levels,” said Manish Hathiramani, Proprietary Index Trader and Technical Analyst, Deen Dayal Investments.

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