Mid-day Mood | Market sees erratic swings as Nifty retreats from record high on profit-booking

Stock Market Today

The a seven-day stellar run, the benchmark indices took a pause with volatility running high and investors rushing to book profit by the midday on September 12. The benchmarks made erratic moves since the morning and the Nifty 50 retreated from its record highs.

Around noon, the Sensex was trading up 213.15 points or 0.32 percent at 67,320.23, and the Nifty was up 39.90 points or 0.20 percent at 20,036.20. Both the indices had opened on a positive note, touching their day's high of 67,539.10 and 20,110.35 before slipping into their day's low of 66,948.18 and 19,914.65.

Buying at the day's lows, however, helped the benchmarks rebound from the red into the black.

The broader market bled the most as investors tried to make some money after a strong outperformance by smallcaps and midcaps in the past month. As a result, the Nifty Smallcap 100 and Nifty Midcap 100 plunged over 2 percent each.

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The slump in the broader market was an omen predicted by several analysts in recent days. Kotak Institutional Equities had recently warned investors of the midcap and smallcap market rally. They recommend avoiding a midcap-focused portfolio as they saw limited stocks with the potential for a fair value increase over the next 12 months, particularly in the BFSI sector. This caution was attributed to the sharp price increases in these segments, driven by what they see as irrational exuberance among investors, despite the deteriorating fundamentals in many companies.

Also Read | BSE MidCap, SmallCap indices trade 3% down as investors rush to book profits

The optimism now remains high for the largecap space, mostly due to the breather it took in August. Most analysts remain bullish on largecaps and expect the positive trend to sustain.

"We think the rally in the benchmarks is looking pretty sustainable because it has been driven by real ground-level activity. And we think that the levers are there for the long run. For example, capacity utilisation has been increasing. And if there are no shocks to this, this rally looks pretty sustainable going forward as well," said Chirag Mehta, CIO, Quantum Mutual Fund.

Stocks and Sectors 

Construction major and index heavyweight Larsen & Toubro was the top gainer on the Nifty 50, surging around 3 percent after the company raised the floor price of its Rs 10,000 crore mega buyback by around 7 percent.

Gains in other index heavyweights like ICICI Bank, Axis Bank, Tata Consultancy Services and Infosys supported the benchmarks and helped limit the fall.

Among sectoral indices, Nifty IT was the top gainer, up over a percent following strong overnight gains in their US counterparts.

With the broader market, railways stocks plummeted as investors chose to book profits after stellar gains in the recent months.

Sugar stocks also slumped 3-7 percent on reports that the government has requested that sugar traders and authorised dealers linked to mills submit information regarding all transactions conducted from May to August 2023 by September 12. This is an attempt to guarantee supply of sugar at affordable rates for the upcoming festive season, according to a report by CNBC-TV18.

Also Read | With Nifty at 20k, this sector enjoys maximum bullishness; Stocks to sustain gains

Among the outliers was L&T Finance Holdings, which rose around 2 percent following a block deal involving 7 crore shares of the company. Even though Moneycontrol could not ascertain the parties involved in the transaction, CNBC-TV18 had reported that investment firm Bain Capital was looking to pare its stake in the non-bank lender.

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