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Markets surrendered most gains, and even dipped into the negative territory briefly in closing hours, amid new restrictions imposed by more States. The stock markets, however, managed to end on a positive note on Thursday.
Markets opened on a positive note and extended gains during the early trade on the back of RBI's liquidity measures. However, it lost momentum in the second half, dragged down by banking and financials.
Tamil Nadu, Madhya Pradesh and Uttar Pradesh have imposed fresh restrictions amidst the spread of Covid scare.
The BSE Sensex closed at 49,746.21, up 84.45 points or 0.17 per cent. It briefly surged past the 50,000-mark to hit an intraday high of 50,118.08 but slipped to a low of 49,581.61. The Nifty 50 slipped below the 14,900 mark after hitting an intraday high of 14,984.15 to close at 14,873.80, up 54.75 or 0.37 per cent.
However, the breadth of the market remained positive, with 1,857 stocks advancing on the BSE, 1,061 declining and 167 remaining unchanged. The number of scrips that hit a 52-week high was 223 as against 36 that were at a 52-week low; 327 securities hit the upper circuit as compared to 177 that hit the lower circuit.
Binod Modi, Head Strategy at Reliance Securities said, “Domestic equities, despite trading positively for most of the sessions today, gave up a large portion of gains towards the end of the day as concerns of rising Covid-19 cases continued to weigh on investors’ sentiments. Financials witnessed profit booking today and dragged market.”
“We believe that local level mobility restrictions due to continued surge in new Coronavirus cases in various parts of the country are expected to keep markets volatile in the near term. While softening of bond yields and crude prices in recent period offered some comforts to markets, a sharp depreciation in INR in last couple of trading days could be a new worry for investors, which can also have an impact on FPIs flow,” added Modi.
Metal, Cement remain firm
Metal and cement stocks gained focus today while financials witnessed aggressive buying in the second half.
JSW Steel, Tata Steel, Shree Cements, Ultratech Cements and Hindalco were the top gainers on the Nifty 50 while Sun Pharma, IndusInd Bank, SBI Life, ONGC and Bajaj Finance were the top losers.
Narendra Solanki, Head- Equity Research (Fundamental), Anand Rathi Shares & Stock Brokers said: “Indian markets opened on a positive note following upbeat Asian market and positive overnight global cues as the US Federal Reserve released minutes from its March meeting during which it kept its accommodative policy in place."
"During the afternoon session, aggressive buying in metal, basic materials, IT, Pharma and consumer durables stocks was seen. Traders took note of World Bank president’s statement that there is faster global growth driven primarily by the US, China and India.”
Sectoral scenario
On the sectoral front, metal stocks recorded the highest gains. Nifty Metal was up 3.92 per cent at closing. Nifty IT was up 1.18 per cent.
Meanwhile, banking, pharma and financial stocks recorded losses. Nifty Bank was down 0.63 per cent while Nifty Financial Services was down 0.34 per cent. Nifty Pharma ended marginally lower, down 0.04 per cent.
“Barring financials, most of key sectoral indices traded in green today with Metal index remaining an outperformer. Expectations of steady 4QFY21 earnings and weakening INR continued to attract investors’ interest towards IT stocks,” said Modi.
Vinod Nair, Head of Research at Geojit Financial Services, said, "Domestic market continued its optimistic rally supported by dovish monetary policy though it witnessed consolidation during the second half due to selling in Banking stocks. Metal stocks led the sectorial rally on a strong outlook supported by rising steel prices and production. Q4 earnings season has started and the market is expected to have a stock centric rally in the coming days which has a very broad positive view."
Broader indices
Midcap and smallcap stocks also lost momentum in the second half. All broader indices closed in green.
Nifty Midcap 50 ended 0.48 per cent higher while nifty Smallcap 50 was up 0.71 per cent.
The S&P BSE Midcap was up 0.60 per cent while the S&P BSE Smallcap index was up 0.73 per cent.
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