Equity indices rebounded from their day’s lows to trade with moderate losses by the afternoon on September 18 as investors took some money off the table after a record run by the benchmarks last week.
The market was range-bound ahead of a trading holiday on September 19 due to Ganesh Chaturthi. Participants were also in the wait-and-watch mode in a week packed with central bank policy meetings, including that of the US Federal Reserve's and the Bank of Japan's, which will give cues on the rate hike trajectory.
At 12.05pm, the BSE Sensex was trading 96.31 points or 0.14 percent lower at 67,742.32, while the broader NSE Nifty shed 12.25 points or 0.06 percent to trade at 20,180.1.
A total of 1,892 stocks advanced, 1,672 stocks declined and 224 counters remained unchanged on the BSE.
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Sector wise, commodities, IT, telecom, realty, teck and healthcare were trading in the red, while auto, utilities, consumer discretionary and power posted gains.
The BSE Midcap index lost over 12 percent on profit-booking, while the smallcap index spurted 8 percent.
M&M was the top gainer in the Sensex pack, rising around 3 percent, followed by Titan, NTPC, SBI, Tata Motors and PowerGrid.
Tata Steel was trading flat after the company signed a joint agreement with the UK government to invest £1.25 billion at its facility in Port Talbot, Wales.
The Tata group company and the UK government announced a joint agreement to invest £1.25 billion in electric arc furnace steelmaking at the Port Talbot site. This includes a grant from the UK government of up to £500 million.
The Port Talbot project will reduce direct emissions by 50 million tonnes over a 10-year period. Further, the project would also involve Tata Steel’s balance sheet being restructured with potential elimination of the current cash losses in the UK operations and non-cash impairment of legacy investments.
India's PSU oil producers ONGC and Oil India stocks were largely unfazed by a hike in the windfall tax.
Earlier, on September 15, the Union government announced an increase in the windfall tax on domestic production of crude oil to Rs 10,000 per tonne from Rs 6,700 per tonne. The increase became effective September 16. In its previous review, the government had reduced the so-called Special Additional Excise Duty (SAED) on crude petroleum to Rs 6,700 per tonne from Rs 7,100 per tonne.
Also Read: Brace for more outflow of foreign funds this week, but market strong enough to rebound
HDFC Bank was the biggest drag on the benchmarks, declining over 1 percent, followed by UltraTech Cement, Infosys, Wipro, Kotak Mahindra Bank and Reliance industries.
Shares of Jupiter Life Line Hospitals made their debut on the bourses on September 18 at a 32 percent premium to the issue price. The stock listed on the NSE at Rs 973 and on the BSE at Rs 960, while its IPO price was Rs 735.
According to analysts, robust subscription numbers, strong brand recall, increasing optimism on the healthcare sector, and an overall bullish sentiment in the equity markets were the reasons behind the double-digit gains.
The market jumped to a new record high on September 15, with the Nifty50 climbing above the 20,200 mark intraday for the first time while the Sensex touched 67,927.23.
“The participation of large-cap bluechips across sectors has been giving strength to the rally which has taken the Nifty well above the 21,000 level. The fact that the fairly valued banking segment has been a significant contributor to the recent rally also is a positive development. PSU banks like BoB, Canara Bank and Indian Bank are even now attractively valued.
“The important question is: will the buy-on-dips strategy, which has worked well so far, work again from the present level? The risks are high. There is a ‘triple danger’ looming over markets in the near-term: dollar index above 105, steadily rising US 10-year bond now around 4.39% and the Brent crude above $94. These are significant macro risks which the market cannot ignore for long. FIIs refraining from big selling is because of the FOMO (fear of missing out) factor,” said VK Vijayakumar, Chief Investment Strategist at Geojit Financial Services.
Investors should exercise caution, particularly in the over-heated mid-and small-cap segments. Safety is in large-caps, he added.
Disclaimer: The views and investment tips expressed by experts on Moneycontrol.com are their own and not those of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.
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