Mid-day Mood: Indices trade flat amid volatility; Pharma, oil stocks shine

Analysts believe a decisive close above 19,500 for the Nifty may trigger more upside towards 19,700.

Benchmark indices traded with minor gains as of afternoon trade on November 8, mirroring the tepid trend seen across most Asian markets. The Nifty 50 also faced selling pressure from its key resistance level of 19,500, which also limited the upside in today's session.

However, sectors such as pharma and oil continued to witness strong buying, bucking the overall tepid sentiment seen across the market. Earnings triggered stock-specific action also took the limelight within the broader market.

At noon, the Sensex was up 31.86 points or 0.05 percent at 64,974.26, and the Nifty was up 29.10 points or 0.15 percent at 19,435.80. About 1,863 shares rose, 1,238 fell, and 108 remained unchanged.

"The Nifty is still trading around the crucial resistance zone 19,450 – 19500 and a decisive close above it shall lead to a further rally upwards till 19,690. On the downside, 19,300 – 19,270 shall act as a crucial support zone from short term perspective," said Jatin Gedia – Technical Research Analyst at Sharekhan by BNP Paribas.

Pharma names such as Dr Reddy's, Cipla, Alkem Labs, and Zydus Life Sciences rose 1-2 percent on the back of defensive buying and their strong quarterly results, which pulled the Nifty Pharma index nearly 2 percent higher.

Oil marketing companies also soared, with shares of Bharat Petroleum Corp surging over 3 percent to emerge as the top gainer on the Nifty. Other OMC stocks such as Indian Oil Corp and Hindustan Petroleum Corp rose 1 percent and 7 percent, respectively, on the back of strong earnings and a sharp fall in Brent crude prices overnight. On that account, the S&P BSE Oil and Gas index also rose over 1 percent.

Other counters like Arvind Fashion, Apollo Tyres, Trent, Cummins India, Greenply Industries also moved higher, buoyed by their solid performance in the July-September quarter.

Shares of Adani Ports and Special Economic Zone traded with over 2 percent gains in the run-up to their Q2 results, due for a release later today.

On the downside, financial names like ICICI Bank, Bajaj Finance, HDFC Life were in the red, limiting the uptrend for the benchmark indices.

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With earnings of most large-cap companies out of the way, the focus shifted to the broader market. Likewise, the Nifty Midcap 100 and Nifty Smallcap 100 outperformed their large-cap peers and rose around a percent on the back of several companies reporting solid growth in Q2.

"Since the buy on dips strategy is working, retail investors are buying in the broader market on every dip. There is no selling pressure in the broader market since FII selling is confined to large caps," said V K Vijayakumar, Chief Investment Strategist at Geojit Financial Services.