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Benchmark indices ended lower amid volatility on Tuesday.
Market opened on a positive note amid positive global cues and remained volatile through the day. Indices erased all early gains to end lower, with multiple counters witnessing selling pressure during closing hours, especially metals, financial and auto.
The BSE Sensex closed at 57,064.87, down 195.71 points or 0.34 per cent. It recorded an intraday high of 58,183.77 and a low of 56,867.51. The Nifty 50 closed at 16,983.20, down 70.75 points or 0.41 per cent. It recorded an intraday high of 17,324.65 and a low of 16,931.40.
Breadth turns positive
The market breadth turned positive even as the benchmark indices closed in the red with 1,778 stocks advancing on the BSE, against the 1,471 that declined, while 153 remained unchanged. Furthermore, 284 stocks hit the upper circuit as compared to the 277 stocks that were locked in the lower circuit. Besides, 158 stocks touched a 52-week high and 33 touched a 52-week low.
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The volatility index rose 1.62 per cent to 21.17, as investors continue to remain cautious.
The increasing spread of the new Omicron variant of the coronavirus continues to be a concern for investors. Market awaits the GDP data to be announced later today.
Naveen Kulkarni, Chief Investment Officer, Axis Securities, said, “An increase in the new variant cases will be a short-term negative for the equity market. Currently, VIX [Cboe Volatility Index] trading around 21 levels signifies an increase in cautiousness, as compared to the previous week. Volatility is likely to continue for some more time, as the direction of the new variant, oil prices, and dollar index will further drive the market fundamentals.”
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“FIIs [foreign institutional investors] are the net sellers in the equity market, especially for the last two weeks, and DIIs [domestic institutional investors] are consistently providing support. With every FII selling, DIIs’ support will be critical for the market,” added Kulkarni.
Moderna Chief Stephane Bancel’s comments that the vaccine may be less effective against the Omicron variant, as compared to the Delta variant, set off alarm bells globally.
S Ranganathan, Head of Research at LKP Securities, said, “In a highly volatile trading day, the street began on a very positive note on expectations of record GST numbers for November, in line with the trends shown by e-way bills. However, post the views of the Moderna CEO on the Omicron variant, markets witnessed selling pressure.”
“While key data points for November, like the auto numbers, were seen playing out, profit-booking by FPI [foreign portfolio investment] kept investors watchful,” added Ranganathan.
According to Vinod Nair, Head of Research at Geojit Financial Services, , “Market optimism was quickly substituted by a sudden sell-off in the domestic market as global equities slipped into negative territory following Omicron experts’ advice to be cautious. Defying the market trend, IT and healthcare stocks along with mid- and small-caps traded with gains.”
Powergrid, Shree Cement, Bajaj Finserv, Titan and Tata Consumer were the top gainers on the Nifty 50 while Tata Steel, Kotak Bank, JSW Steel, Adani Ports and Bajaj Auto were the top laggards.
Metals lose shine
On the sectoral front, consumer durables, IT and realty indices gained focus while metals, auto and financials dragged.
Nifty Metal closed 1.94 per cent lower. Nifty Bank and Nifty Financial Services were down 0.78 per cent and 0.54 per cent, respectively. Nifty Private Bank and Nifty PSU Bank were down 0.73 per cent and 0.58 per cent, respectively. Nifty Auto was down 0.94 per cent.
Meanwhile, Nifty Consumer Durables was up 2.24 per cent. Nifty IT and Nifty Realty were up 0.50 per cent and 0.62 per cent, respectively.
Broader indices
Broader indices managed to retain gains and close in the green.
Nifty Midcap 50 was up 0.12 per cent while Nifty Smallcap 50 was up 1.34 per cent. The S&P BSE Midcap was up 0.29 per cent while the S&P BSE Smallcap was up 1.45 per cent.
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