Closing Bell: Sensex, Nifty end higher as metals shine; autos drag

Taking Stock: Nifty Ends Above 16,550, Sensex Up 145 Points; Metals Shine

The Nifty has to hold above 16,450 to extend the momentum towards 16,700 and 17,000, while on the downside, support shifts higher to 16,350 then 16,300 levels, say experts... Read More

The Nifty had broken out on the upside recently following a brief consolidation. Despite of a negative start on August 16, the index managed to inch higher. However, the hourly momentum indicator is showing weakness. It has turned its trajectory down from the overbought zone. Thus the index can step into a minor consolidation before heading higher. The consolidation can take place near 16450-16600 post which the Nifty can head towards 16800 in the short term.

Markets traded lacklustre and ended marginally higher, in absence of any major trigger. The tone was muted in the beginning however healthy buying in select heavyweights like Reliance combined with stocks from the metal and financials space aided the index to inch higher as the session progressed. The broader market indices continued their underperformance and ended lower in a range of 0.3-0.8%.

As the results season is largely behind us, domestic factors viz. updates on further unlocking and pace of vaccination will remain in focus. Meanwhile, performance of the global indices may induce further volatility. Since we’re seeing limited participation, traders should focus on sectors which are trading in sync with the benchmark and wisely choose the stocks.

Nifty has once more formed a bullish candle at closing, with gaining intraday 33.95 points it managed to close at new record high levels, now going ahead 15500 will act as a psychological level for immediate support followed by 15475 -16425-16375 levels. Similarly on the upper side 16600 will act as resistance followed by 16675 levels.

Nifty Bank which underperformed Nifty50 which lost 74.85 points and closed at 36094.50, has immediate support at 35900 & if it breaks this level then 35700-35550 will be the next support. On the upside 36300 will be the hurdle above which 36550-36700 will act as the resistance level.

The Metal Index and Capex plans in Europe by Tata Steel helped Indices to close in the green today as Reliance together with the Bajaj Twins lent good support. However, the under-performance of PSU stocks continues to worry investors even as the Pharma names met with selling pressure yet again. Stellar listing of a QSR today which provided 55% returns cheered IPO investors.

Despite weak global market conditions, Indian markets maintained the bullish momentum amid sharp intraday volatility. On daily charts, benchmark index Nifty has formed a breakout continuation formation. The texture of the chart suggests the 16,450-16,400 level would act as a key support level for the day traders. As long as the index is trading above the same, the uptrend texture is likely to continue up to 16,600-16,640 levels. In the near future, the market may consolidate near 16,600 resistance level.

Indian markets started mixed following mixed Asian markets cues as China economic data disappoints with retail sales in China rose 8.5% in July as compared with a year ago, far lower than the 11.5% forecasted. Also, worries around geopolitical concerns in Afghanistan kept investors on bay. During the afternoon session, markets turned positive as buying in Energy, Oil & Gas and Metal sectors lifted the indices. Sentiments were upbeat as India's annual wholesale price inflation eased to 11.16% in July from the previous month's 12.07%, helped by lower increases in the cost of fuel and food items. Additional support also came with ICRA Ratings’ report stating that that most states are likely to be in better fiscal health this financial year as 20 of them are collectively carrying forward Rs 2.6 lakh crore borrowed in FY21 to this fiscal.

The domestic market failed to maintain its momentum and traded on a flat note throughout the day as selling was witnessed in the key sectors amidst weakness in global markets. India’s WPI inflation eased for the second consecutive month to 11.16% in July against 12.07% in June as food and crude prices softened.

Metals outshined other indices backed by better quarterly earnings. Due to weaker-than-expected Chinese economic data and surge in virus outbreaks, global indices traded under pressure.

The wholesale inflation in July’21 registered a year-on-year increase of 11.2%, lower than the rise of 12.1% in June’21. This was the fourth successive month of double digit growth and this high rate of inflation in large part is credited to the low base/ low inflation reading of the corresponding period of 2020. Although on a year-on-year basis, the growth in wholesale inflation softened in July, it continued to rise on a sequential basis. This raises concerns over the underlying price pressures in the economy. CARE Ratings' expect WPI Inflation to be around 10% for the next couple of months.

: Benchmark indices ended on positive note supported by metal and oil & gas names.

At close, the Sensex was up 145.29 points or 0.26% at 55582.58, and the Nifty was up 33.90 points or 0.21% at 16563. About 1146 shares have advanced, 2068 shares declined, and 136 shares are unchanged.

On the sectoral front, Nifty metal added over 1 percent, while selling was seen in the auto, bank, pharma and IT names. BSE midcap and smallcap indices ended in the red.

Tata Steel, Bajaj Finance, M&M, IOC and Britannia Industries were the top Nifty gainers. Maruti Suzuki, Shree Cements, Power Grid Corp, Bajaj Auto and Eicher Motors were among the top losers.

The market witnessed some lackluster movement and an attempt to hold the support level around the Nifty 50 Index level of 16500. The market shows that it is going to be crucial for the short-term market scenario to sustain above the 16500 level.

The deviation in Nifty 50, Nifty mid-cap and Nifty small-cap hence market advise the traders to refrain from building a new buying position until further improvement is seen in the market breadth.

Gold prices edged lower on Monday as the dollar held steady, although receding worries about early tapering by the Federal Reserve and concerns over the Delta coronavirus variant kept bullion near a one-week peak.

The research house Nomura has maintained buy rating on the stock with a target at Rs 650 per share.

The Q1 was in-line and the outlook is good. The volume was impacted by COVID-19 but should see a sharp recovery.

Its gross margin improves in Q1 and further expansion likely in Q2.

The volume recovery is underway and launch of new CNG variants to boost conversions. Also, over 100% domestic gas price hike is likely and expect CGDs to pass on price rise.

Indraprastha Gas was quoting at Rs 539.35, up Rs 4.50, or 0.84 percent on the BSE.