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Benchmark indices ended flat on Monday after recording fresh all-time highs with the Nifty 50 crossing the 18,000-mark for the first time.
Market opened on a positive note despite weak global cues and extended gains in the first half lead by gains in auto and heavyweights such as RIL. But indices lost momentum during closing hours, dragged by IT stocks, which witnessed pressure after TCS second quarter results that missed market expectations.
The Nifty 50, after recording a fresh all-time high of 18,041.95, closed at 17,945.95, up 50.75 points or 0.28 per cent. It hit an intraday low of 17,839.10. The BSE Sensex, which recorded a fresh all-time high of 60,476.13, closed at 60,135.78, up 76.72 points or 0.13 per cent. It recorded an intraday low of 59,811.42.
Breadth remains positive
The market breadth remained positive with 1,952 stocks advancing on the BSE, 1,481 declining and 159 remaining unchanged. Furthermore, 516 stocks hit the upper circuit as compared to the 192 stocks that were locked in the lower circuit. Besides, 369 stocks touched a 52-week high level and 21 touched a 52-week low.
S Ranganathan, Head of Research at LKP securities said, "The Nifty scaled mount 18K today led by Reliance, Auto stocks & Power stocks even as the IT Index faced profit booking throughout the day. The broader market saw heightened activity in Exchange stocks with Nifty PSE stocks lending good support. The afternoon session, however, did see profit booking as stocks do remain vulnerable to earnings disappointment."
Vinod Nair, Head of Research at Geojit Financial Services, said, "The domestic market continued its bullish run backed by gains in banking, power, realty and auto sectors. However, the indices gave away early gains following weakness in global peers due to rising commodity prices and the upcoming earnings season, compelling investors to trade cautiously.”
“The auto sector continued its outperformance in expectation of demand revival during the festive season and power & renewable energy will continue to be in focus. Banking stocks followed the trend owing to strong business preview numbers and favourable credit growth data. However, the IT sector was under pressure as initial earnings releases failed to meet market expectations,” said Nair.
Market is likely to remain volatile this week ahead of earnings announcements as IT majors like Infosys, Wipro and HCL Technologies will announce their numbers during the week apart from companies such as HDFC Bank, Avenue Supermarts and Mindtree. The volatility index rose 2.76 per cent to 16.09.
Market sentiment was supported by a balanced RBI policy meeting outcome announced on Friday.
Tata Motors, Coal India, Maruti, Powedgrid and Grasim were the top gainers on the Nifty 50 while TCS, Tech Mahindra, Infosys, HCL Tech and Britannia were the top losers.
IT stocks under pressure, due to TCS
TCS ended 6.29 per cent lower cent on the NSE after its Q2 FY 2022 earnings failed to meet market expectations.
Binod Modi, Head Strategy at Reliance Securities, said, Domestic equities extended gains today with benchmark Nifty and Sensex witnessing fresh all-time highs. Strong rebound in heavyweight financials in the backdrop of expectations of strong Q2FY22 earnings and possible write-back from select bad assets supported rally today. Further, auto stocks also witnessed healthy recovery led by expectations of strong festive demand in ensuing weeks.”
“IT stocks witnessed selling pressure today led by subpar performance reported by TCS in its 2QFY22 earnings. Volatility index hardened over 2 per cent showing some amount of unease at the top,” added Modi.
Realty, financials jump
On the sectoral front, all indices except Nifty IT closed in the green. While auto, realty, financials, and metals recorded gains.
Nifty Auto was up 2.67 per cent at closing while Nifty Realty was up 1.73 per cent. Nifty Bank and Nifty Financial Services were up 1.37 per cent and 1.39 per cent. Nifty Metal was up 1.50 per cent.
Meanwhile, Nifty IT was down 3.36 per cent.
Broader indices
Broader indices also closed in the green, outperforming the benchmarks.
Nifty Midcap 50 was up 0.74 per cent at closing while Nifty Smallcap 50 was up 1.44 per cent. The S&P BSE Midcap was up 0.55 per cent while the S&P BSE Smallcap was up 0.60 per cent.
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