Benchmark indices turned around sharply on Thursday in the closing hours to end in the green, led by a sharp recovery in IT and financials stocks even as pharma stocks remained firm throughout the day. 

Benchmark indices mainly remained lower amid negative global cues and concerns over the increasing number of Covid-19 cases, forcing several States, including Maharashtra, to adopt harsher restrictions.

The BSE Sensex closed near the day's high of 48,887.85 at 48,803.68, up 259.62 or 0.53 per cent. It recovered from an intraday low of 48,010.55. The Nifty 50 also closed above the physiological mark of 14,500 at 14,581.45, up 76.65 points or 0.53 per cent. It hit an intraday high of 14,597.55 and a low of 14,353.20.

However, the breadth of the market was in favour of decliners as midcap and smallcap stocks suffered. As many as 1,247 stocks advanced on the BSE, 1,649 have declined, and 161 remained unchanged. The number of scrips that hit a 52-week high was 132 as against 44 that hit 52-week lows; 244 securities hit the upper circuit compared to 229 that hit the lower circuit. 

Binod Modi, Head Strategy at Reliance Securities, said, "Domestic equities looked to be resilient amid high volatility. Benchmark indices recovered sharply from today's low mainly led by a rebound in financials and pharma indices."

TCS, Wipro, Cipla, ONGC and ICICI Bank were among the top gainers on the Nifty 50 while Grasim, Eicher Motors, Maruti, Infosys and IndusInd Bank were among the top laggards. 

WPI inflation jumps 

Separately, wholesale inflation surged to over an eight-year high of 7.4 per cent in March, over 3 percentage points more than February. According to a release issued by the Commerce & Industry Ministry, wholesale inflation based on the Wholesale Price Index (WPI) registered surge mainly based on higher fuel and metal prices. This may further impact market sentiments.

According to Suman Chowdhury, Chief Analytical Officer, Acuité Ratings & Research, "The WPI trajectory over the last 3 months further reinforces the concerns on the underlying inflationary pressures which can get further aggravated by a re-emergence of supply constraints in the wake of the second Covid wave."

"While the sharp rise in the fuel and power component to 10.25 per cent in the previous month is understandable in the light of the rise in global crude and domestic retail fuel prices, the rise in prices of manufactured products by 7.34 per cent reflects a steady transmission of input costs. One case in point is the 14.51 per cent rise in wholesale prices of mild steel prices on a YoY basis. Clearly, this does not augur well for retail inflation in the near term; however, the favourable base factor in the previous year may help to moderate the average CPI print for FY22," added Chowdhury. 

Auto stocks lag behind

"Auto stocks were worst hit today mainly due to wider economic restrictions imposed in Maharashtra, which contributes over 20 per cent of automobiles production of the country. Infosys witnessed heavy profit booking after missing street's estimate in 4QFY21 earnings. However, strong buying was seen in other IT majors due to sustained growth prospects," said Modi. 

"A continued surge in the second wave of Covid-19 cases has certainly dented investors' sentiments," Modi added. 

Nifty Auto and Nifty PSU Bank recorded the highest losses on the sectoral front and were down 1.29 per cent each. The Nifty FMCG was down 0.18 per cent while Nifty Realty was down 0.38 per cent. 

Meanwhile, Nifty Pharma continued to gain focus and ended 1.40 per cent higher. It was followed by Nifty Metal which was up 1.37 per cent at closing.

Financials also gained momentum in the second half. Nifty Financial Services was up 1.17 per cent at closing. 

Vinod Nair, Head of Research at Geojit Financial Services, said, "Market is becoming more cautious as states are increasing restrictions due to the havoc created by the virus. Growth-oriented sectors & stocks are losing momentum while defensives like Pharma, FMCG & IT are gaining. However, states will not opt for a complete lockdown like last year, but high valuation will lead to a phase of short-term consolidation."

Mid & SmallCap tumble

Broader indices underperformed on the market, with Nifty Midcap 50 and Nifty Smallcap 50 closing in the red.

Nifty Midcap 50 was down 0.53 per cent while Nifty Smallcap 50 was down 0.35 per cent. The S&P BSE Midcap index was down 0.10 per cent, while the S&P BSE Smallcap was down 0.03 per cent at closing.

The volatility index softened in the second half. However, it still ended 2.10 per cent higher. 

 

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