Sensex up 101 pts intraday, Nifty above 17,400 amid volatility

Our Bureau Mumbai | Updated on September 21, 2021

Metal stocks recover, auto stocks remain under pressure

Benchmark indices were trading with marginal gains during the afternoon on Tuesday, led by a sharp recovery in metals. Stocks swing wildly during the day, especially from the mid-cap space.

Market opened on a flat note amid volatility, tracking weak global cues. Mounting concerns related to the possible default of China’s second-largest real estate giant Evergrande spooked investors in the global market, negatively impacting the US markets. Investors remained cautious ahead of the outcome of the crucial Federal Open Market Committee (FOMC) meeting this week.

However, in the domestic market, benchmarks managed marginal gains amid sustained foreign fund inflow. IT and Oil & Gas stocks helped sustain gains while auto, financials and consumer durables stocks faced pressure.

At 1 pm, the BSE Sensex was trading at 58,592.27, up 101.34 points or 0.17 per cent. It hit an intra-day high of 58,779.42 and a low of 58,232.54. The Nifty 50 was trading at 17,434.15, up 37.25 points or 0.21 per cent. It hit an intra-day high of 17,481.10 and a low of 17,326.10.

ONGC, JSW Steel, IndusInd Bank, UPL and Cipla were the top gainers on the Nifty 50 while Maruti, Hero MotoCorp, Bajaj Auto, Axis Bank and HDFC Bank were the top laggards.

Evergrande crisis

Dr. V K Vijayakumar, Chief Investment Strategist at Geojit Financial Services, said, “The Evergrande crisis has caused a minor sell-off in markets with the Dow and S&P falling by around 1.7 per cent each and Nasdaq and Russel 2000 correcting by above 2 per cent each. Concerns are being expressed whether this might turn out to be China’s Lehman moment. This appears far-fetched now since Evergrande’s debt is not widely held and, therefore, is unlikely to lead to contagion with systemic risks.”

“The recovery in the Dow which was down 972 points at the lows to close with a loss of 614 points is an indication of the market's confidence that contagion is unlikely. However, investors have to be cautious since markets are richly valued and, therefore, vulnerable to corrections. The ultimate impact of the Evergrande crisis is yet to be seen and known,” Dr Vijayakumar added.

However, according to Vijayakumar, there is an alternate view that the crisis, apart from the regulatory crackdown in China earlier may bode well for India, facilitating increasing capital flows to India.

“This may play out in the medium to long term. The FOMC meet starting today may give a timeline on tapering. This will be watched closely by markets, globally. This is likely to be a ‘taper without tantrum’,” Dr Vijayakumar said.

Metals shine

On the sectoral front, metals rebounded sharply while Realty, IT, Pharma and Oil & Gas also gained. Auto, financials and consumer durables faced pressure.

Nifty Metal was up 1.30 per cent while Nifty Realty was up 2.63 per cent. Nifty IT was up 0.94 per cent. Nifty Pharma and Nifty Healthcare Index were up 0.83 per cent and 0.49 per cent, respectively. Nifty Oil & Gas was up 0.55 per cent.

Meanwhile, Nifty Auto was down 1.04 per cent. Nifty Bank and Nifty Financial Services were trading 0.65 per cent and 0.36 per cent lower, respectively. Nifty PSU Bank was down 0.55 per cent while Nifty Private Bank was down 0.37 per cent. Nifty Consumer Durables was down 0.52 per cent.

Broader indices

Broader indices continued to face selling pressure and were in the red.

Nifty Midcap 50 was down 0.02 per cent while Nifty Smallcap 50 was down 1.05 per cent. The S&P BSE Midcap was up 0.08 per cent while the S&P BSE Smallcap was down 0.68.

The volatility index softened 1.71 per cent to 17.19.

Published on September 21, 2021

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