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Benchmark indices closed in the red on Wednesday, after witnessing record highs during the morning session, due to profit-taking.
Market opened on a positive note amid mixed global cues following strong GDP and fiscal deficit numbers and foreign fund inflow. However, indices erased all later in the day, dragged by losses in IT and metals. Pharma stock also faced pressure during closing hours.
The BSE Sensex which narrowly missed the 58,000 mark with an intraday high of 57,918.71, closed at 57,338.21, down 214.18 points or 0.37 per cent. It hit an intraday low of 57,263.90. The Nifty 50 closed at 17,076.25, down 55.95 points or 0.33 per cent after recording a fresh high of 17,225.75. It hit an intraday low of 17,075.55.
Market favours decliners
The breadth of the market remained in favour of the decliners as many as 1,664 stocks were declined on the BSE, as compared to 1,513 stocks that advanced while 153 remained unchanged. Furthermore, 282 stocks hit the upper circuit as compared to the 204 stocks that were locked in the lower circuit. Besides, 226 stocks touched a 52-week high level and 17 touched a 52-week low.
Vinod Nair, Head of Research at Geojit Financial Services, said, "Despite a strong opening due to favourable GDP data, domestic indices failed to hold onto its early gains due to profit booking strategy from the recent rally. India’s GDP rose due to the low base effect and was powered by private consumption expenditure & investment.
Asian Paints, Tata Motors, SBI Life, Nestle India and Axis Bank were the top gainers on the Nifty 50 while Mahindra & Mahindra, Cipla, Tata Steel, Hindalco and Bajaj Finserv were the top losers.
Rupee gains aid FPI inflow
According to S Hariharan, Head - Sales Trading, Emkay Global Financial Services, “In conjunction with sharp appreciation in INR (USD dropped from 74.3 to 72.8) over the last 3 sessions, FII flows into equities have also picked up pace. This is in some part attributable to inflows at MSCI rebalance on August 31. Alongside these flows, FIIs have also been increasing net long positions in single stock futures for the entire month of Aug – an increase of nearly $3.5 billion.”
“Nifty continued to out-perform mid-cap & small-cap indices, as Retail sentiment continues to be relatively weak – Retail net long positioning in single stocks has come down by $2 bn. FMCG and consumption-related plays continue to be the leaders in the rally, while sentiments appear to be cooling in IT sector on account on rich valuations and consensus over-weight positioning. Banking continues to be the weakest sector relative to the market. Strong liquidity conditions both domestically & abroad have helped push through a heavily loaded IPO pipeline, and domestic MFs have seen strong responses to new fund offers as well,” added Hariharan.
Metals, IT under pressure
On the sectoral front, as IT and metals witnessed profit-booking, realty, banking and consumer durables gained. Pharma and financial services also dragged.
Nifty IT was down 1.33 per cent while Nifty Metal was down 1.79 per cent. Nifty Financial Services was down 0.19 per cent while Nifty Pharma was down 0.17 per cent.
Meanwhile, Nifty Realty was up 5.57 per cent. Nifty Bank was up 0.41 per cent. Nifty Private Bank and Nifty PSU Bank were up 0.45 per cent and 0.86 per cent, respectively. Nifty Consumer Durables was up 1.98 per cent.
Auto stocks were in focus today as a host of auto companies announced the sales figures for August. Nifty Auto ended flat, up 0.09 per cent.
“The auto sector showed a flattish trend as sales for August saw a decline following supply constraints,” said Nair.
The impact of semiconductor shortages was noted in the August auto sales numbers of companies such as Maruti Suzuki India (MSIL), Hyundai Motor India (HMIL), Toyota Kirloskar Motor (TKM) and Nissan India.
Broader indices
As for broader indices, Nifty Midcap 50 was up 1.10 per cent while Nifty Smallcap 50 was down 0.08 per cent. The S&P BSE Midcap was up 0.92 per cent while the S&P BSE Smallcap was up 0.22 per cent.
The volatility index softened 2.30 per cent to 14.19.
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