Closing Bell: Sensex, Nifty end flat amid volatility; PSU bank, oil & gas stocks rally

Ajit Mishra, VP - Technical Research, Religare Broking

Markets started the week on a volatile note and ended almost unchanged, in continuation to the prevailing corrective phase. After the gap-down start, the Nifty index oscillated sharply on both sides and finally settled at 18497.15 levels. Meanwhile, a mixed trend on the sectoral front kept the traders busy wherein buoyancy in the banking capped the downside. Besides, recovery in the broader indices further eased the pressure.

Markets are currently dancing to the global tunes and we expect the same trend to continue, in absence of any major domestic event. Traders should focus on sectors that are showing resilience viz. banking, FMCG and metal for the long trades while the IT and pharma may continue to trade subdued. At the same time, managing risk is also critical citing the upcoming event and data.

After retreating sharply in early trades, both benchmark indices recouped most of their losses but traded range-bound in a listlesss trading for almost entire trading session, as investors mostly stayed on the sidelines ahead of the inflation data and the US Fed meeting later this week.

More clarity will emerge post the US Fed meeting, which would determine the trend in the near term.

The Nifty stepped into a short term consolidation phase in the last week. As a result, it opened gap down on December 12. On the downside, the bulls moved in to offer support as the index inched towards the short term support of 18300, which is 78.6% retracement of the recent up move.

On the other hand, recovery for the day was restricted near 18500. Overall structure shows that the Nifty can have a short term consolidation in the range of 18300-18650. The Bank Nifty, on the flip side, is maintaining its positive trajectory.

A tepid start-off in the domestic market was flattened due to a recovery in banking, metals, and oil & gas, while continued selling in IT stocks weighed on the indices.

Key inflation numbers are expected to soften from the previous month, owing to a moderation in food prices. Extending the stock market route, the global markets remained fragile as rate decisions by major central banks took centre stage.

Indian rupee closed 27 paise lower at 82.54 per dollar on Monday against Friday's close of 82.27.

: Indian benchmark indices ended marginally lower in the volatile session on December 12.

At Close, the Sensex was down 51.10 points or 0.08% at 62,130.57, and the Nifty was up 0.60 points at 18,497.20. About 1787 shares have advanced, 1688 shares declined, and 194 shares are unchanged.

Asian Paints, Infosys, Eicher Motors, Titan Company and Kotak Mahindra Bank were among the top Nifty losers, while gainers were BPCL, Divis Laboratories, Coal India, Apollo Hospitals and UPL.

Among sectors, Information Technology index down 0.5 percent, while PSU bank and oil & gas indices up 1 percent each.

BSE midcap and smallcap indices ended marginally higher.

-Downgrade to equal-weight from overweight, target at Rs 160 per share
-Taking a breather after strong recent run up
-Profitability across businesses has been improving & gaining investor recognition
-See scope for further medium-term re-rating

Aditya Birla Capital was quoting at Rs 157, up Rs 1.15, or 0.74 percent on the BSE.

The initial public offering of Sula Vineyards, the leading wine producer in India, has garnered bids for 30.33 lakh equity shares against IPO size of 1.88 crore shares, getting subscribed 16 percent on December 12, the first day of bidding.

Retail investors and high networth individuals turned active on the first day itself, buying 30 and 6 percent of their quotas respectively.

But qualified institutional buyers are yet to put in their bids for the offer. They already have invested Rs 288.10 crore in the company via the anchor book.