It was a choppy day of trade on the D-Street on Thursday — also the expiry day for August F&O series — as investors looked to book profits post the Wednesday’s surge. Implied volatility ahead of the expiry day also strained the markets through the day.
Having said that, a sharp surge in the last hour of trade helped indices end the August series on a strong note with the Nifty closing above 9,900-mark.
The Street now is awaiting the key GDP data that will be released later in the day.
Among index heavyweights, Reliance Industries, HDFC and Maruti Suzuki gained, while Infosys and ICICI Bank dragged.
Banking stocks, on the whole, underperformed, with the Nifty Bank closing flat, but PSU banks ended one-third of a percent higher.
The Sensex was up 84.03 points at 31,730.49, while the Nifty was up 33.50 points at 9,917.90. The market breadth was in favour of advances as 1509 shares advanced against a decline of 1062 shares, while 134 shares were unchanged.
“Markets in India traded on a volatile note largely on account of expiry of August derivatives contracts. Traders rolled over positions from the August series to the September series, perpetuating large swings in the market,” Karthikraj Lakshmanan, Senior Fund Manager – Equities, BNP Paribas Mutual Fund said in a statement.
In terms of stocks, Biocon ended lower by 2 percent as investors could have reacted to the deadline extension given by USFDA for its breast cancer drug.
The company on Wednesday said US drug regulator agreed to give three months extension of target action day for its breast cancer biosimilar Trastuzumab. The original target action day was September 3. Target action day is the deadline set by USFDA to take a decision on the application to approve a new drug.
Fortis Healthcare shares fell 5 percent after the Supreme Court reaffirmed status quo against Singh brothers in share sale case. The court has refused to vacate stay on Malvinder Singh and Shivinder Singh from alienating and selling assets. The court clarified that it maintained status quo, applicable to both encumbered & unencumbered assets.
Grasim gained over 1.5 percent after its group firm Aditya Birla Capital will be listed on exchanges on Friday.
Shares of DCB Bank lost over 3 percent intraday as investors turned cautious of regulatory developments around its key stakeholder.
According to a report in The Hindu BusinessLine, the Aga Khan Foundation for Economic Development (AKFED), which holds 14.22 percent in the bank, has come under the scanner. AKFED, which owns 51 per cent stake in Pakistan’s largest bank Habib Bank, was fined over ₹4,000 crore by the US banking regulator for money laundering activities, the report added.
This, regulatory officials in India say, has put the role of Habib Bank’s promoters, AKFED, under a cloud.
Among commodities, gold eased by Rs 50 to Rs 30,050 per ten gram at the bullion market today largely in tandem with a weak trend overseas amid tepid demand from local jewellers.
Silver, too, fell by Rs 100 to Rs 40,500 per kg due to reduced offtake by industrial units.
Traders said sentiment remained bearish on weak global cues as the dollar strengthened against a basket of major currencies after strong US growth data fuelled speculations that the Federal Reserve could consider interest rate hike for a third time this year, diminishing demand for precious metals.
Gasoline prices hit $2 a gallon for the first time since 2015 on Thursday as flooding from Hurricane Harvey knocked out almost a quarter of US refineries, while crude prices stabilised following a slump the previous day.
The hurricane has battered the US Gulf coast since last Friday, ripping through Texas and Louisiana at the heart of the US petroleum industry. At least 4.4 million barrels per day (bpd) of refining capacity was offline, or almost a quarter of total US capacity, based on company reports and Reuters estimates.
On the international front, European markets moved higher on Thursday as investors digested fresh data and geopolitical fears eased.
The pan-European Stoxx 600 was 0.57 percent higher with most sectors trading in positive territory.
Asian indexes closed mixed on Thursday as the dollar extended gains and investors digested China manufacturing and services PMIs, as well as solid US economic data.
Japan's Nikkei 225 rose 0.72 percent, or 139.7 points, to close at 19,646.24, with gains seen across automakers and most tech stocks, as the dollar strengthened against the yen. Meanwhile, South Korea's Kospi erased 0.38 percent, or 9.1 points, to end at 2,363.19.
Going forward, experts believe there could be some challenging times. Avendus Capital Alternate Strategies expects the volatility in the market to continue. “There could be more volatility in the next few weeks,” Andrew Holland, Chief Executive Officer, Avendus Capital Alternate Strategies.
But, is this the big catalyst for a big correction in the market? He thinks otherwise. Having said that, valuations are still high on the back of strong liquidity and there is no fear in the market, he added.(With inputs from CNBC, PTI, and Reuters)