Benchmark indices gave up early gains to end half a per cent lower on Wednesday, dragged by auto and IT stocks.

Market opened on a positive note amid mixed global cues. However, benchmark indices gave up early gains amid volatility ahead of the F&O expiry, with multiple counters witnessing profit-booking.

The BSE Sensex closed at 58,340.99, down 323.34 points or 0.55 per cent. It recorded an intraday high of 58,968.12 and a low of 58,143.44. The Nifty 50 closed at 17,415.05, down 88.30 points or 0.50 per cent. It touched the 17,600-mark briefly in the first half with an intraday high of 17,600.60. It recorded an intraday low of 17,354.00.

Breadth remains positive

The market breadth, however, remained positive with 1,956 stocks were seen advancing as against 1,334 that have declined, while 140 remained unchanged on the BSE . Furthermore, 496 stocks hit the upper circuit as compared to the 151 stocks that were locked in the lower circuit. Besides, 209 stocks touched a 52-week high level and 25 touched a 52-week low.

The volatility index. which had dropped below 16 during the day, rose 5.10 per cent to close at 17.10.

Binod Modi, Head Strategy at Reliance Securities, said, “Domestic equities gave up gains amid high volatility mainly on selling pressure witnessed in auto and IT stocks. Further, profit booking was also seen pharma and FMCG counters. However, financials and metals remained resilient.”

“Strong buying remained visible in small-cap stocks. Investors preferred to book some amount of profit in auto names after sharp rally in recent days, which was also triggered to an extent due to F&O expiry tomorrow. Notably, PSU banks witnessed sharp upmove today on growing expectations of divestments,” added Modi.

ONGC, Adani Ports, Coal India, NTPC and Kotak Bank were the top gainers on the Nifty 50 while Eicher Motor, Tata Consumer, Maruti, Grasim and Infosys were the top laggards.

According to Amar Ambani, Head, Institutional Equities, Yes Securities, In the near term, there are signs of some exhaustion in the equity rally after the ferocious rise seen over the past few months.”

“Sector rotation has happened and mid-caps have already massively rallied. FII inflows have also paused after hefty buying in August and September. This can be attributed to expectations of faster than expected normalisation of the Fed’s monetary policy,” said Ambani.

“There is pressure on a few heavyweights like Reliance, which is dragging the benchmark index down. Having said that the correction which we have seen in Nifty and Sensex is of a lower magnitude when compared with the base levels during the past. Nevertheless, the markets are certainly taking a pause and the correction could extend by another 5 per cent. On the broader perspective, we reiterate our bullish stance, with our positive rationale very much in place,” added Ambani.

Auto, IT under pressure

On the sectoral front, while financials and oil & gas stocks managed to retain gains, auto, IT FMCG and pharma dragged.

Nifty Auto was down 1.28 per cent while Nifty IT was down 1.52 per cent. Nifty Pharma and Nifty Healthcare Index were down 0.61 per cent and 0.60 per cent, respectively. Nifty FMCG and Nifty Consumer Durables were down 0.99 per cent and 0.46 per cent, respectively.

Meanwhile, Nifty Bank and Nifty Financial Services were up 0.45 per cent and 0.23 per cent, respectively at closing. Nifty Private Bank was up 0.47 per cent while Nifty PSU Bank was up 0.34 per cent. Nifty Oil & Gas was up 0.47 per cent.

Broader indices

As for broader indices, Nifty Midcap 50 was down 0.52 per cent at closing while Nifty Smallcap 50 rose 0.48 per cent.

The S&P BSE Midcap was down 0.57 per cent while the S&P BSE Smallcap was up 0.44 per cent.

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