Stocks

Sensex, Nifty scale new peaks, but broader market sees sell-off

Our Bureau Mumbai | Updated on August 04, 2021

Sensex up 546 points at closing, Nifty above 16,200

Benchmark indices scaled new peaks on Wednesday, but the rally was narrow, sustained solely by financials. Stock across mid- and small-cap space corrected as profit-booking emerged strongly.

The BSE Sensex which breached the 54,000-mark for the first time, ended on a high at 54,369.77, up 546.41 points or 1.02 per cent. It recorded a fresh all-time high of 54,465.91 and a day’s low of 54,034.31.

The Nifty 50 also recorded a fresh all-time high of 16,290.20, closing at a high of 16,258.80, up 128.05 points or 0.79 per cent. It recorded an intraday low of 16,176.15.

Breadth turns negative

Even as major indices recorded fresh highs, the breadth of the market turned negative amid selling pressure with a ratio of 2:1 between decliners and advancers. As many as 2,119 stocks declined, 1,137 advanced, 116 remained unchanged on the BSE. While 344 stocks hit an upper circuit, almost equal 329 stocks were locked in the lower circuit. Besides, 467 stocks touched 52-week high level and 16 touched a 52-week low.

Binod Modi, Head Strategy at Reliance Securities said, “Domestic equities extended gains today with benchmark Nifty scaling fresh high mainly on the back of a sharp rebound in heavyweight financials.”

“Further, positive cues from global equities also lifted sentiments. Notably, Financials have been the sole driving force today for market rally, which essentially triggered after better-than-expected June quarter performance reported by SBI. However, it was not a broad-based rally today as a sharp profit booking remained visible for the second consecutive day in midcap and smallcap stocks,” added Modi.

HDFC, Kotak Bank, ICICI Bank State Bank of India and HDFC Bank were the top gainers on the Nifty 50 while Grasim, Titan, Tata Motors, Adani Ports and Hindalco were the top laggards.

S Hariharan, Head - Sales Trading, Emkay Global Financial Services, said, “Nifty is trading close to technical resistance from a trendline connecting earlier highs in CY2021 (Feb & Jun) – seen in conjunction with non-confirmation of strength in Mid-cap & Small-cap indices, which had hitherto been out-performing headline indices, this suggests a narrow advance, and potential for a short-term pull-back.”

“Long futures open interest for the Retail segment has seen some unwinding over the last week and net long positions are down to mid-Jun levels; this was also evident in cheap roll spreads during July expiry, and points to reluctance to extend leverage on long positions. High-beta sectors appear most vulnerable to a correction in the near-term,’’ he added.

Financials remain resilient

On the sectoral front, a majority of indices closed in the red as financials gained focus.

Nifty Bank was up 2.33 per cent while Nifty Financial Services was up 2.59 per cent. Nifty Private Bank was up 1.94 per cent while Nifty PSU Bank was up 0.31 per cent.

Meanwhile, Nifty FMCG was down 0.93 per cent, Nifty Realty down 1.67 per cent and Nifty Auto down 0.93 per cent. Nifty IT was down 0.61 per cent.

Broader indices

As mentioned before, midcap and smallcap stocks continued to witness profit-booking.

Nifty Midcap 50 was down 1.19 per cent while Nifty Smallcap 50 was down 1.11 per cent.

The S&P BSE Midcap was down 1.05 per cent while the S&P BSE Smallcap was down 1.06 per cent.

The volatility index fell 3.89 per cent to 13.21.

Published on August 04, 2021

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