Benchmark indices closed in the red on Wednesday, amid volatility ahead of the monthly F&O expiry on Thursday.
Market opened on a negative note, tracking weak global cues amid the pressure of rising US bond yields. Indices managed to recover marginally from the day’s losses during closing hours, but were dragged by losses in heavyweight financials, auto and FMCG. The volatility index which touched 19.44 during the day closed 1.63 per cent higher at 18.84.
The BSE Sensex closed at 59,413.27, down 254.33 points or 0.43 per cent. It hit an intraday high of 59,678.66 and a low of 59,111.41. The Nifty 50 closed at 17,711.30, down 37.30 points or 0.21 per cent. It hit an intraday high of 17,781.75 and a low of 17,608.15.
The market breadth turned positive with as many as 1,915 stocks advancing on the BSE, as compared to 1,364 stocks that were declined while 155 remained unchanged. Furthermore, 366 stocks hit the upper circuit as compared to the 160 stocks that were locked in the lower circuit.
Besides, 218 stocks touched a 52-week high level and 28 touched a 52-week low.
S Ranganathan, Head of Research at LKP securities said, "Markets were volatile for the second consecutive day with the street wary of inflation on the back of supply-side disruptions and higher commodity prices.”
“As China pulls back on the back of power shortages, export opportunities are seen opening up for several Indian companies with the PLI schemes providing the catalyst. PSE index rose for the second consecutive day with Power stocks hogging the limelight. As the gap between growth and value stocks widen, we are witnessing sector rotation in several pockets,” said Ranganathan.
NTPC, Coal India, Powergrid, Sun Pharma and IOC were the top gainers on the Nifty 50 while HDFC, Kotak Bank, Asian Paints, Ultratech Cement and Eicher Motor were the top losers.
Binod Modi, Head Strategy at Reliance Securities said, “Domestic equities witnessed brisk recovery from days’ low amid mixed cues from global equities mainly led by strong rebound in metal, pharma, and PSU banks. Further, IT and realty stocks also recovered sharply. Metals stocks were in focus today led by sustained visibility of earnings growth and improving export outlook for domestic metal companies. Coal India witnessed sharp uptick today on account of rise in underlying commodity prices and general shift from growth to value stocks.”
According to Modi, despite the recent gains in the market, investors remain on the tenterhook with regard to progress on Evergrande. Further, a sharp rise in USA bond yield and dollar index that rose nearly 15 per cent in a month could be a near term risk for emerging markets.
Financials, auto and FMCG drag
On the sectoral front, financials, barring witnessed significant losses. Auto and FMCG also dragged while pharma, realty and metals gained.
Nifty Bank and Nifty Financial Services were down 0.53 per cent and 0.88 per cent, respectively. Nifty Private Bank was down 1.08 per cent while Nifty PSU Bank closed 2.72 per cent higher. Nifty FMCG was down 0.52 per cent while Nifty Auto was down 0.38 per cent.
Meanwhile, Nifty Metal was up 2.29 per cent at closing. Nifty Realty was up 1.13 per cent. Nifty Pharma and Nifty Healthcare Index were up 1.65 per cent and 1.17 per cent, respectively.
On the BSE, the BSE Power Index closed 3.52 per cent higher led by Tata Power which gained over 8 per cent at closing.
Broader indices
As for the broader market, midcaps witnessed stronger buying, outperforming the benchmarks.
The Nifty Midcap 50 was up 1.13 per cent while the Nifty Smallcap 50 was down 0.21 per cent. The S&P BSE Midcap was up 0.62 per cent while the S&P BSE Smallcap was up 0.40 per cent.