Broader markets outperform, Midcap up 1%; Sensex closes lower; Tata Steel up 4%
The broader markets outperformed benchmarks, with the BSE Midcap and Smallcap indices rising 1 percent each.
Equity benchmarks closed a rangebound session with marginal losses but the broader markets outperformed, with the BSE Midcap and Smallcap indices rising 1 percent on Monday.
The market opened higher on positive global cues after better-than-expected US jobs data, but immediately turned volatile and traded in a tight range for the rest of the session. Investors are awaiting remaining corporate earnings due this week.
The 30-share BSE Sensex was down 51.74 points at 32,273.67 and the 50-share NSE Nifty fell 9 points to 10,057.40 despite positive market breadth. About three shares advanced for every two shares falling on the BSE.
Experts expect the consolidation to continue for a couple of sessions before the market getting direction on either side. According to them, as long as the Nifty holds 10,000 level, the market may make an attempt to hit fresh record highs soon.
“In the recent past, this kind of short term weakness or sell signals didn’t work out in favour of bears. In the back drop of this kind of behavioural changes on short term technical parameters we advise traders to remain cautiously optimistic till severe breakdowns on higher time frame charts are visible," Mazhar Mohammad, Chief Strategist – Technical Research & Trading Advisory, Chartviewindia.in told Moneycontrol.
Mohammad advises traders with a high-risk appetite to focus on stock specific opportunities and remain long with a stop below 9,988 levels on closing basis.
Vinod Nair, Head of Research, Geojit Financial Services feels positive sentiment and high liquidity will continue to support the market while any major disparity between earnings and current valuation could lead to consolidation.
Tata Steel was the biggest gainer among Nifty50 stocks, up 4 percent ahead of June quarter earnings due later today.
Oil retailer IOC continued to rally, up 3 percent on top of 8 percent upside in previous session post better-than-expected refining margin in the first quarter. Buying also continued in peers - HPCL (up 6 percent) and BPCL (up 2 percent).
Tata Motors and Mahindra & Mahindra lost over a percent as finance ministry clarified that the GST Council has authorised the Centre to raise car cess from 15 percent to 25 percent.
Technology stocks were under pressure due to appreciation in rupee. TCS, Infosys, HCL Technologies, Wipro and Tech Mahindra fell 0.5-1.5 percent.
Country's biggest lenders State Bank of India and ICICI Bank gained 1-2 percent.
Britannia Industries surged 5 percent after better-than-expected numbers for the quarter ended June. Domestic volume growth stood at 3 percent against a CNBC-TV18 poll estimates of 0-1 percent.
Dabur India rose nearly 4 percent as brokerage houses see a gradual recovery in the volumes going forward and expect the second half to be better, though the company reported a 10 percent drop in consolidated net profit for June quarter due to provisions made for goods and services tax (GST).
Dr Lal PathLabs, Natco Pharma, Caplin Point and Whirlpool gained up to 3 percent post Q1 earnings. Amara Raja Batteries was up 2 percent despite weak numbers.
Sintex Industries rallied 7.4 percent ahead of listing of Sintex Plastics on Tuesday.
Tyres stocks - MRF, Apollo Tyres (despite subdued earnings), CEAT and Balkrishna Industries surged up to 9 percent as a media report indicated that the government may impose anti-dumping duty on certain Chinese tyres.Asia markets closed higher, with investors' risk sentiment likely improving from Friday's better-than-expected US jobs number. Japan's Nikkei, China's Shanghai Composite, Hong Kong's Hang Seng and Australia's ASX 200 gained 0.5-1 percent. However, European markets were mixed at the time of writing this article.