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Benchmark indices closed in the green on Tuesday, extending gains for a second day, supported by positive cues from the Asian market and a strong performance in banking and financial stocks. The market, which was lacklustre till 2:30 pm, saw a sudden spurt in value, thanks to a late hour buying by institutional investors in information technology stocks.
However, analysts said the buying was limited to a few index heavyweights, especially from the banking and finance space. However, the broader market witnessed selling pressure,they added.
The BSE Sensex closed at 51,025.48, up 584.41 points or 1.16 per cent. During the day, it touched an intraday high of 51,111.94 and an intraday low of 50,396.10. TheNSE Nifty 50 closed at 15,098.40, up 142.20 points or 0.95 per cent.
Bank stocks sizzle
The Nifty Bank index was up 1.67 per cent to 35,865.65, outperforming most stocks since February 24. The NiftyFinancial services was up by 2.24 per cent to 16,649.75 while Nifty Private Bank was up by 1.78 per cent to 19,192.50.
Nifty IT, recovering from the day’s low was up 0.92 per cent to 25,582.35.
Top gainers on the Sensex pack include Kotak Bank, HDFC Bank, HDFC and ICICI Bank, HDFC and Tech Mahindra which was among the laggards during the first half but gained momentumin the second half.
Reliance, ITC, Larsen & Toubro, State Bank of India and Sun Pharma and were the top laggards.
As many as 1,264 shares have advanced while 1,727 declined and 202 remain unchanged. In all, 326 scrips hit the upper circuit on the BSE and 272 recorded new 52-week highs.
Binod Modi, Head Strategy at Reliance Securities said, “Domestic equities extended gains for the second consecutive day mainly aided by favourable cues from Asian markets. However, it is financials (ex-PSU Banks), which majorly supported the market’s rally today. Barring financials and IT, most of the key sectoral indices traded lower. Notably, midcap and small cap indices were down today as investors optedto take profit off the table after recent run-up in these spaces.”
Ashis Biswas, Head of Technical Research at CapitalVia Global Research Limited said, “The market witnessed an attempt to break above the resistance level around the Nifty50 Index level of 15100. The expected levels of the market are likely to be in the range of 14900 and 15100, and it’s going to crucial for the short-term market scenario to sustain above the 14900 Nifty50 index level.”
Mid-, Small-cap, sectoral indices slip
Among the sectoral indices, barring IT, Financial and FMCG stocks, all indices ended lower. Smallcap and Midcap indices also ended lower.
Nifty Midcap 50 was down 0.66 per cent to 6,931.65, while the Nifty Smallcap 50 was down 0.97 per cent to 4,157.10.
S&P BSE Midcap was at 20,512.22, down 137.22 or 0.66 per cent. The S&P BSE SmallCap closed at 20,981.64, down 85.56 points or 0.41 per cent.
Insurance stocks hog the limelight
Insurance stocks also performed well on Tuesday owing to a strong performance in February 2021 ahead of the financial year-end. HDFC Life and SBI Life recorded fresh 52-week highs. HDFC Life and SBI Life, the top performers on the NSE, also hit fresh 52-week highs. HDFC Life recorded a fresh 52-week high of ₹746.00 on the NSE while SBI Life recorded a fresh high of ₹983.75.
SBI Life, Kotak Bank, HDFC Bank, Tech Mahindra and HDFC were the top gainers on the NSE.
After recording strong gains on Monday, oil & gas stocks lost momentum on Tuesday. Metal stocks also declined over 2 per cent.
BPCL, Tata Steel, Gail, Indian Oil Corporation and PowerGrid were the top laggards on the NSE. Nifty Metal was down 2.51 per cent to 3,802.70. The S&P BSE Metal index closedat 13,744.54, down 314.43 points or 2.24 per cent.
The S&P Oil & Gas index was down 331 points or 2.02 per cent at 16,019.77.
S Ranganathan, Head of Research at LKP Securities said, "Markets slipped into the red on sustained selling in metal stocks and profit booking in oil & gas stocks, but bounced back sharply in late afternoon trade as Crisil sounded out an optimistic GDP forecast for the coming fiscal. The broader markets witnessed sustained buying interest in leading private sector banks and private life insurers"
A surge in crude prices and mixed global cues may impact FPI outflow. However, analysts remain positive on the market outlook.
“In our view, rising crude prices, surge in bond yields and weakening INR could be near-term risks for domestic equities, which have already resulted in FPIs’ outflow in recent days. However, we continue to believe that a recent rise in bond yield is discounting a faster recovery in economic growth and this is unlikely to move northward beyond a point,” said Modi.
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