Stocks

Market wipes out losses to end flat; banks, financials slip

Our Bureau Mumbai | Updated on May 03, 2021

Sensex down 64 points at close, Nifty below 14,700

The market recovered from its early losses to end flat on Monday, dragged down by bank stocks. The market opened on a negative note and remained volatile through the day as concerns related to the Covid-19 situation continued to weigh on investor sentiment.

The BSE Sensex, after hitting an intra-day low of 48,028.07 in early trade, closed at.48,718.52, down 63.84 points or 0.13 per cent. In fact, the index recovered sharply to hit an intra-day high of 48,863.23 during the closing hours.

The Nifty 50 closed at 14,634.15, down 3.05 points or 0.02 per cent. It hit an intra-day high of 14,673.85 and an intra-day low of 14,416.25.

However, the breadth of the market was positive with 1,823 stocks advancing, 1,218 declining and 173 remaining unchanged on the BSE. As many as 376 securities hit the upper circuit and 246 hit the lower circuit, 263 hit their 52-week high, while 48 touched a 52-week low.

Binod Modi, Head Strategy at Reliance Securities said, “Domestic equities recovered sharply from the day's low despite weak global cues. While a persistent rise in the second wave of Covid-19 cases has weighed on investor sentiment, steady corporate earnings with positive managements’ commentaries offered support to markets.”

The recovery in the second half was led largely by metals and FMCG.

SBI Life, Bharti Airtel, Adani Ports, Tata Steel and Maruti were among the top gainers on the Nifty 50 while Titan, IndusInd Bank, Reliance, Axis Bank and BPCL were among the top laggards.

Narendra Solanki, Head- Equity Research (Fundamental), Anand Rathi Shares & Stock Brokers, said, “Indian new cases breached the 4 lakh mark for the first time during the weekend.”

“Sentiments were under pressure after India's manufacturing sector activity was largely flat in April, as rates of growth for new orders and output eased to eight-month lows amid the intensification of the Covid-19 crisis. The seasonally adjusted IHS Markit India Manufacturing Purchasing Managers’ Index (PMI) was at 55.5 in April, little changed from March's reading of 55.4. However, the markets scaled back and turned marginally positive towards the closing session with major support coming from sectors such as metals, FMCG, Pharma and Auto,” added Solanki.

On a positive note GST collection for April, despite localised lock-downs, hit an all-time high of ₹1.41 lakh crore.

“Notably, a persistent rise in second wave of COVID-19 cases, increasing death cases and extended partial lockdown announced by several states are expected to keep the economic momentum soft for May also. While the market is still factoring in daily caseload to peak out by the end of May or mid of June, any possibility of absence of reversal in caseload within June ’21 may result in a sell-off in domestic equities. Record GST collection of ₹1.41 trillion for April’21 offers comfort,” said Modi.

Metals, FMCG shine

On the sectoral front, while banking, realty and financials lagged behind, FMCG, metal, pharma and auto led the market recovery.

Nifty Bank was down 0.96 per cent at closing, while Nifty Financial Service was down 0.20 per cent. Nifty Realty was down 1.11 per cent.

Nifty Metals recorded the highest gains and was up 2.16 per cent. Nifty FMCG was up 1.10 per cent.

Nifty Pharma and Nifty Auto were up 0.28 per cent and 0.23 per cent, respectively.

“While growing uncertainties about collection efficiency and asset quality of banks / NBFCs dragged heavy weight financials, strong buying in FMCG and metals supported recovery in markets. Further, Pharma, Auto and IT also came to the rescue,” Modi said.

Vinod Nair, Head of Research at Geojit Financial Services said, "The domestic market bounced back from its early losses to trade flat owing to global cues and strong buying seen in FMCG and metal stocks. Financial stocks were the top laggards due to weak results of mid-sized banks and NBFCs, while buying interest was seen in small-cap stocks.”

Smallcap outperforms

As for broader indices, all indices except the Nifty Midcap 50, closed in the green. Strong buying was witnessed in small-cap stocks while mid-caps underperformed as compared to benchmark indices.

Nifty Midcap 50 was down 0.56 per cent at closing while Nifty Smallcap 50 was up 0.78 per cent. The S&P BSE Midcap index was up 0.05 per cent at closing while the S&P BSE Smallcap index was up 1.57 per cent.

Notably, the volatility index was up 2.88 per cent to 23.69.

Published on May 03, 2021

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