Sensex, Nifty end flat with a positive bias

Our Bureau Mumbai | Updated on September 14, 2021

Metals lose shine on a day when auto, IT and private bank stocks remained firm

Profit-taking at higher levels shaved off most early gains on Tuesday, as benchmark indices closed flat.

The market opened on a positive note, amid mixed global cues and easing of retail inflation. However, the market lost momentum during closing hours. Investor sentiments were impacted by wholesale inflation numbers. Metals and FMCG faced pressure. Auto, IT and private bank stocks remained firm.

The BSE Sensex closed at 58,247.09, up 69.33 or 0.12 per cent. It hit an intraday high of 58,482.62 and a low of 58,214.29. The Nifty 50 closed at 17,380.00, up 24.70 points or 0.14 per cent. It hit an intraday high of 17,438.55 and a low of 17,367.05.

Breadth remains positive

The breadth of the market remained positive with as many as 1,934 stocks advancing on the BSE, as compared to 1,309 stocks that declined while 153 remained unchanged. Furthermore, 393 stocks hit the upper circuit as compared to the 177 stocks that were locked in the lower circuit. Besides, 256 stocks touched a 52-week high and 27 touched a 52-week low.

IndusInd Bank, HCL Tech, Hero Motocorp, Adani Ports and Tata Motors were the top gainers on the Nifty 50 while UltraTech Cement, HDFC, BPCL, Nestle India and Tata Steel were the top laggards.

Vinod Nair, Head of Research at Geojit Financial Services, said, “Despite a bullish opening, domestic indices closed flat with a positive bias amid mixed sentiment among global peers. India’s retail inflation softened to 5.3 per cent in August, staying within RBI’s comfort zone, which was led by lower food inflation. However, the wholesale price inflation accelerated to 11.39 per cent, snapping the two-month easing trend, owing to non-food articles. Global markets traded cautiously ahead of the US consumer price index to be released today.”

Divergence in CPI and WPI

Higher prices of mostly non-food products pushed producers’ inflation, based on wholesale price index (WPI), to 11.39 per cent in August, as against 11.16 per cent in July. This is contrary to retail inflation based on consumer price index (CPI), which slipped to a four-month low of 5.3 per cent in August.

According to Suman Chowdhury, Chief Analytical Officer, Acuité Ratings & Research, “The divergent trend between CPI and WPI inflation indicates that the current inflationary risks are primarily emerging from the impact of commodity prices on manufacturing sector, where further pass-through is likely as demand continues to improve.

“Although the food category may continue to provide relief in the near term, such transmission of production costs may keep core inflation at elevated levels. With easing of supply-side bottlenecks and overall demand impulse gradually ticking up, we believe that the peak in the headline wholesale inflation is behind us; but we would be closely monitoring the momentum in core inflation in order to gauge the pass-through of higher input costs to end-consumers.”

Metals lose shine

On the sectoral front, a majority of indices were in the green. While media, auto, IT, private bank stocks and consumer durables gained, metals and FMCG faced pressure.

Nifty Metal was down 0.50 per cent at closing while Nifty FMCG was down 0.30 per cent.

Meanwhile, a sharp rally in Zee Entertainment pushed Nifty Media up 14.40 per cent. Nifty Auto closed 0.88 per cent higher. Nifty Private Bank was up 1.03 per cent and Nifty Consumer Durables and Nifty IT were up 0.86 per cent each.

Midcaps shine

The broader indices were in the green, outperforming the benchmarks, as midcaps recorded significant gains.

Nifty Midcap 50 was up 1.95 per cent at closing while Nifty Smallcap 50 was up 0.18 per cent. The S&P BSE Midcap was up 1.09 per cent while the S&P BSE Smallcap was up 0.63 per cent.

The volatility index softened 3.20 per cent to 13.58.

Published on September 14, 2021

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