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Benchmark indices scaled new highs for the third consecutive session on Thursday, closing in the green, even as the broader market continued to face a sell-off.
The market, after starting on a weak note amid mixed global cues, managed to retain gains in the second half, led by IT, FMCG and metal stocks. Heavyweight financials witnessed profit-booking as investors await the outcome of the crucial Reserve Bank monetary policy meeting, which is set to conclude tomorrow.
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The BSE Sensex closed at a new high of 54,492.84, up 123.07 points or 0.23 per cent, and recorded a new all-time high of 54,717.24 during the day. The low was 54,230.89. The Nifty 50, which also recorded a fresh all-time high of 16,349.45, closed at a record 16,294.60, up 35.80 points or 0.22 per cent. It recorded an intraday low of 16,210.30.
Vinod Nair, head of research at Geojit Financial Services, said, “Despite witnessing consolidation in the opening session, large caps managed to continue trading at record high levels with support from IT, metal and FMCG stocks. Banking stocks continued to be under pressure ahead of the RBI’s policy announcement.”
Breadth remains negative
Even as major indices recorded fresh highs, the breadth of the market remained negative with 2,031 stocks declining, 1,197 advancing and 123 remaining unchanged on the BSE. Furthermore, 391 stocks hit the lower circuit, more than the 293 stocks that were locked in the upper circuit. Besides, 305 stocks touched a 52-week high and 14 touched a 52-week low.
Bharti Airtel, Eicher Motors, ITC, Tech Mahindra and Tata Steel were the top gainers on the Nifty 50 while State Bank of India, IndusInd Bank, ICICI Bank, Bajaj Finance and Bajaj Finserv were the top laggards.
Narendra Solanki, Head – Equity Research (Fundamental), Anand Rathi Shares & Stock Brokers, said, “Indian markets started flat following mixed Asian market cues as tech stocks in China were seen trading lower with Australia recording a trade surplus of around 10.5 billion Australian dollars (about $7.75 billion) in July, which was above forecasts.
“Adding optimism, Rajya Sabha passed the Limited Liability Partnership (Amendment) Bill, which seeks to encourage the start-up ecosystem and further boost ease of doing business.”
He added that traders were encouraged by reports that foreign portfolio investors (FPIs) remained buyers of domestic stocks to the tune of ₹2,828.57 crore.
Bharti Airtel in focus
The Bharti Airtel stock remained in focus today post its Q1 FY 2022 earnings call. Though the telco major reported a 62.7 per cent sequential fall in consolidated net profit, amounting to ₹284 crore, for the quarter ended June, its consolidated revenues saw a sequential rise of 4.3 per cent to ₹26,854 crore, which was above estimates.
Airtel neared its year-high during the day, at ₹619.20 on the BSE. It closed at ₹598.90, up ₹24.70 or 4.3 per cent. On the NSE, the top gainer on the Nifty 50 today, Airtel was up 3.86 per cent at closing.
“Bharti Airtel was in focus today as the recent tariff hike and expectations of better ARPU [average revenue per user] in subsequent quarters supported it,” said Binod Modi, Head Strategy at Reliance Securities.
With the threat of duopoly emerging, Vodafone Idea, on the other hand, slumped another 1.49 per cent at closing.
Financials, auto and realty under pressure
On the sectoral front, while IT stocks, FMCG and metal recovered sharply, financials, realty and auto witnessed profit booking.
Nifty Bank was down 0.54 per cent while Nifty Financial Services was down 0.35 per cent at closing. Nifty Private Bank was down 0.37 per cent while Nifty PSU Bank was down 2.23 per cent. Nifty Realty was down 1.09 per cent while Nifty Auto was down 0.21 per cent.
Nifty IT, meanwhile, was up 0.76 per cent. Nifty Metal was up 1.29 per cent and Nifty FMCG was up 0.60 per cent.
Broader indices under pressure
Broader indices underperformed against the benchmarks.
Nifty Midcap 50 was up 0.10 per cent while Nifty Smallcap 50 was down 0.32 per cent. The S&P BSE Midcap was up 0.10 per cent while the S&P BSE Smallcap was down 0.43 per cent.
The volatility index fell 2.57 per cent to 12.87.
“Importantly, the broad market has started to underperform. Investors should be cautious in the short term, regarding the performance of mid and small caps, after the thrilling rally during the year,” said Nair.
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