Benchmark indices ended flat on Wednesday, dragged by metals and financials.

Market opened on a weak note, tracking weak global cues, and remained in the red. Indices managed to recover marginally during closing hours, led by heavyweights such as Reliance and the gains in oil and gas and auto stocks.

The BSE Sensex closed at 60,352.82, down 80.63 points or 0.13 per cent. It hit an intraday high of 60,506.50 and a low of 59,967.45. The Nifty 50 closed at 18,017.20, down 27.05 points or 0.15 per cent. It recorded an intraday high of 18,061.25 and a low of 17,915.00.

Breadth positive

The market breadth was positive with 1,709 stocks advancing on the BSE, 1,602 declining and 146 remaining unchanged. Furthermore, 410 stocks hit the upper circuit as compared to the 147 stocks that were locked in the lower circuit. Besides, 221 stocks touched a 52-week high and 20 touched a 52-week low.

Vinod Nair, Head of Research at Geojit Financial Services, said that the domestic market continued to trade negative after a disappointing opening as inflation worries affected the global markets. However, the action was stock-specific.

“China’s CPI rose 1.5 per cent year-on-year, while the producer price index rose by 13.5 per cent year-on-year owing to imported inflation and domestic supply shortages. Globally, investors are awaiting the release of the US inflation data due later today, which is expected to continue at peak levels,” added Nair.

Additionally, continued FII selling has kept the overall momentum weak, according to analysts.

S Hariharan, Head-Sales Trading, Emkay Global Financial Services, said, “Market sentiment has been somewhat weaker with respect to institutional flows over the last week — FIIs have been net sellers worth ₹4,000 crore in cash segment and ₹2,500 crore in stock futures in November so far. Retail long leverage through stock futures continues to be very strong — net long open interest is up to $14 billion, which is a life high. Exuberant participation in primary issuances and high leverage, combined with peaking of earnings upgrade cycle, pose a major risk in the near term for broader markets.”

“The auto sector has been benefiting from the cooling off of metals prices, which have acted as a headwind to margins, as well as a cut in fuel excise duties. Pharma sector faces price erosion headwinds in the US market and can be a likely under-performer going ahead,” said Hariharan.

UPL, Bharti Airtel, Mahindra & Mahindra, Britannia and Reliance were the top gainers on the Nifty 50 while Hindalco, IndusInd Bank, Tata Steel, JSW Steel and Coal India were the top laggards.

Metals lose shine

On the sectoral front, a majority of indices closed in the red. Even as financials, metals and realty dragged, auto, oil and gas, and pharma stocks managed to retain gains.

Nifty Metal was down 1.76 per cent at closing. Nifty Bank and Nifty Financial Services were down 0.88 per cent and 0.39 per cent, respectively. Nifty PSU Bank and Nifty Private Bank were down 2.35 per cent and 0.94 per cent, respectively. Nifty Realty was down 1.36 per cent.

Meanwhile, Nifty Auto was up 0.53 per cent and Nifty Oil and Gas was up 0.75 per cent. Nifty Pharma and Nifty Healthcare index were trading 0.23 per cent and 0.30 per cent higher, respectively.

Vikas Jain, Senior Research Analyst at Reliance Securities, said, “Metal stocks witness profit booking as China steel price drops amid weakening demand and iron ore stocks hit 31-month high.”

“Metal stocks like Tata Steel, JSW Steel, Jindal Steel and SAIL declined 2-4 per cent after the news that China’s steel prices had declined rapidly amid weakening demand and lower material prices, and that prices are likely to slide further in the fourth quarter,” said Jain.

“There was a renewed focus in the pharma sector on the hope of a price hike after news of a group of pharma companies reportedly urging the government to allow an increase in the prices of all non-scheduled drugs by 20 per cent due to rising input costs,” Jain added.

Broader indices

Broader indices also closed in the red, with midcaps facing increased pressure.

Nifty Midcap 50 was down 0.54 per cent at closing while Nifty Smallcap 50 was down 0.08 per cent. The S&P BSE Midcap was down 0.50 per cent while the S&P BSE Smallcap was down 0.01 per cent.

The volatility index rose 1.89 per cent to 16.31.

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