Closing Bell: Indices end flat amid high volatility; IT, pharma stocks gain

Taking Stock: IT, Pharma Help Market Recover; Mid, Smallcaps Outperform

Broader indices outperformed the benchmarks, with BSE midcap and smallcap indices rising 0.7-1 percent on yet another day of volatile trade.... Read More

Fear of the second wave of Covid-19, elevated bond yield and weak global cues is weighing on the domestic market. The expectation of rise in inflation is also impacting the market. The market has marched well in anticipation of faster economic recovery and is taking a breather given tightening restrictions & an increase in future interest rate, spiking fear of a slower recovery.

Rupee traded in a small range with mixed reactions of stable crude prices and higher dollar index price in the past few days. The range between 72.30-72.70 looks very much to continue, as the markets broadly are in a weak direction for the USDINR pair. In any scenario of serious lockdown there might be chances of USDINR appreciation but till then it’s an advantage bulls for rupee.

Indian rupee ended higher by 14 paise at 72.37 per dollar, amid selling saw in the domestic equity market.It opened marginally higher at 72.48 per dollar against Friday's close of 72.51 and traded in the range of 72.33-72.51.

Markets opened weak on fears of the recent spike in coronavirus infections in a few states. Afternoon trade however witnessed a recovery led by cement stocks (both large and midcap) with support from technology stocks.

: Benchmark indices ended flat with negative bias on March 22 after last hour buying erased all the intraday losses supported by the IT, Metal, FMCG and Pharma names.

At close, the Sensex was down 86.95 points or 0.17% at 49,771.29, and the Nifty was down 7.60 points or 0.05% at 14, 736.40. About 1570 shares have advanced, 1427 shares declined, and 223 shares are unchanged.

IndusInd Bank, Power Grid Corp, ICICI Bank, Tata Motors and HDFC Bank were among major losers on the Nifty, while gainers were Adani Ports, Tech Mahindra, TCS, Britannia Industries and Sun Pharma.

Among sectors, Nifty IT, Metal, pharma and FMCG indices added 1 percent each, while Nifty Bank and PSU Bank index shed a percent each. BSE Midcap and Smallcap indices rose 0.7-1 percent.

The dollar index is currently holding above 92.00 and is likely to keep precious metals prices under pressure. Silver is currently trading near 25.55 which is nearly 3% lower from Friday closing.

Strength in global bond yield is also adding pressure on precious metals. The 10-year T-note yield on Friday rose +1.5 bp to 1.723%. Concern about the third wave of Covid infections in Europe is expected to cut economic growth which is negative for industrial metals and silver. German Health Minister Spahn on Friday said that Germany is in the grip of a "third wave" of rising Covid cases and "there are some fairly challenging weeks ahead of us.

According to the CFTC Commitments of Traders report for the week ended March 16, net long for Silver futures sank 2,540 contracts to 33,609 for the week. Speculative long position plunged 787 contracts, while shorts were added by 1753 contracts. Silver prices are likely to face stiff resistance near $26.30 and $27.22 while it may find support around $24.90.

Today the market failed to show resilience to stay above the level of 14,750. As of now, the short-term technical condition of the market shows that the expected range of the market is likely to be between 14,410 and 14,900. While it is subject to further price action evolution, the market expects to gain momentum above the level of 14,900. As such the traders are advised to refrain from building a fresh buying position until further decisive movement is seen in the market.

We are upbeat about L&T as one of the key beneficiaries of infrastructure development for 90% of the addressable opportunity in the government’s Rs102trn planned investment over FY20-25 under the flagship NIP. We expect hydrocarbon capex in the Middle East to revive because of rising crude-oil prices.

With robust orders and a sturdy pipeline, revenue assurance is healthy. We expect 17%/28% revenue/PAT CAGRs over FY21-23. Valued on a sum-of-parts basis and at a 20x multiple for its core business, we arrive at a higher target price of Rs 1,763. We retain a buy while risks included sluggish capex and volatile crude prices.

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Oil prices resumed their decline on Monday, falling more than 1% on renewed concerns that European lockdowns may slow an anticipated recovery in demand for fuel products.

Indian rupee extended the early gains and trading higher at 72.37per dollar, amid selling seen in the domestic equity market.It opened marginally higher at 72.48 per dollar against Friday's close of 72.51.