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Benchmark indices ended flat amid volatility on Monday.
Market opened on a positive note amid positive global cues. However, indices erased all early gains to end flat, dragged by metals and PSU Bank stocks. Healthcare, pharma and FMCG gained focus.
The BSE Sensex closed at 60,718.71, up 32.02 points or 0.05 per cent. It recorded an intraday high of 61,036.56 and a low of 60,597.36. The Nifty 50 closed at 18,109.45, up 6.70 points or 0.04 per cent. It recorded an intraday high of 18,210.15 and a low of 18,071.30.
Decliners outnumber
The market breadth turned in favour of the decliners with 2,113 stocks declining on the BSE as against 1,306 that advanced while 157 remained unchanged. Furthermore, 396 stocks hit the upper circuit as compared to the 334 stocks that were locked in the lower circuit. Besides, 234 stocks touched a 52-week high level and 46 touched a 52-week low.
Powergrid, ONGC, ITC, Cipla and UPL were the top gainers on the Nifty 50 while Coal India, Tata Steel, Hindalco, Eicher Motor and SBI Life were the top laggards.
Narendra Solanki, Head- Equity Research (Fundamental), Anand Rathi Shares & Stock Brokers said, “Indian markets opened on a positive note on Monday despite mixed cues from it Asian market peers where Chinese shares traded lower post better than expected consumer spend data.”
“Positive sentiments were getting support with Commerce and Industry Minister’s statement that the proposed free trade agreements (FTAs) with countries, including Australia, the UK and the UAE, are moving at a fast pace and these pacts, when implemented, would help provide greater market access to domestic goods.”
However, according to Solanki, upside remain capped as WPI inflation in October 2021 surged to 12.54 per cent from 10.66 per cent a month ago and 1.31 per cent in October 2020.
“The high rate of inflation in October 2021 is primarily due to rise in prices of mineral oils, basic metals, food products, crude petroleum & natural gas, chemicals and chemical products etc as compared the corresponding month of the previous year,” said Solanki.
Vinod Nair, Head of Research at Geojit Financial Services said, "Domestic market was trading with a negative bias, between gains and losses, tracking volatile global markets and in the wake of domestic inflation data.”
“On the contrary, China’s Industrial output growth accelerated to 3.5 per cent YoY despite fresh covid restrictions and supply shortages, thereby easing concerns over a global economic slowdown. Buying interest in consumer durables and healthcare stocks outweighed bleeding metals and PSU banks to end the day’s trading session on a flat note," added Nair.
Retail inflation based on the CPI rose marginally to 4.48 per cent in October from 4.35 per cent the previous month. At the same time, industrial growth based on the IIP decelerated on a sequential basis to 2.5 per cent in September.
Suman Chowdhury, Chief Analytical Officer, Acuité Ratings & Research said, “ The WPI print for Oct-21 highlights the underlying inflationary pressures in the economy.”
“There has been a steep sequential rise in inflation of primary articles and fuel and power which stood at 3.1 per cent and 8.7 per cent respectively which clearly reflects the continuous rise in commodity prices including oil, coal and that of various metals. As seen in headline CPI, there has been a visible spurt in primary food articles due to the rise in vegetable and fruit prices; however, we believe this is likely to be transient in nature due to the arrival of the kharif crop in the market,” added Chowdhury.
Acuité further expects continuing supply-side bottlenecks, raw material shortages and high commodity prices to maintain the core inflation at such high levels, said Chowdhury.
Metals, PSU Bank stocks drag
On the sectoral front, metals and PSU Bank stocks faced pressure through the day while healthcare, pharma, FMCG and consumer durables gained.
Nifty Metal was down 1.82 per cent at closing while Nifty PSU Bank was down 1.43 per cent.
Meanwhile, Nifty Pharma and Nifty Healthcare Index were up 1.45 per cent and 2.13 per cent respectively. Nifty FMCG and Nifty Consumer Durables were up 0.94 per cent and 0.65 per cent, respectively.
Broader indices
Broader indices closed in the green with midcaps outperforming the benchmarks.
Nifty Midcap 50 was up 0.43 per cent at closing while Nifty Smallcap 50 was up 0.10 per cent. The S&P BSE Midcap was up 0.41 per cent.
The S&P BSE Smallcap Index, however, was down 0.19 per cent.
The volatility index rose 1.62 per cent to 15.47.
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