Closing Bell: Sensex, Nifty end flat amid high volatility; capital goods stocks gain

After a volatile action for the week gone by, the Nifty posted a negative close on the weekly chart. The price action for the last 2-3 weeks shows that the index is in a short term consolidation phase. It is witnessing sideways action below a crucial falling trendline. The daily Bollinger Bands have started contraction, which suggests that the consolidation is likely to continue going ahead.

In terms of the price patterns, the Nifty has formed a Double Inside bar on the daily chart. Developments on the lower time frame indicate that the Nifty is gearing up for a down move within this short term consolidation. With the next move down, the index can test 17200 on the downside. On the higher side, 17700-17780 is acting as a key resistance zone

The market has struggled for a firm direction today as global markets were largely under selling pressure ahead of the release of US job data, which could provide insight into upcoming Fed actions.

Oil prices rose ahead of the OPEC+ meeting on the expectation of a reduction in output, despite the fact that weak global growth prospects remain a concern.

A surging dollar index and rising US bond yields could be reflected in the elevated volatility of the domestic market in the near term.

: In the highly volatile session, Indian benchmark indices ended on flat note on September 2.

At Close, the Sensex was up 36.74 points or 0.06% at 58,803.33, and the Nifty was down 3.30 points or 0.02% at 17,539.50. About 1726 shares have advanced, 1612 shares declined, and 137 shares are unchanged.

BPCL, Shree Cements, Hero MotoCorp, Hindalco Industries, ONGC were among major losers on the Nifty, while gainers were HDFC, ITC, Adani Ports, Larsen and Toubro and HDFC Bank.

On the sectoral front, capital goods index rose 1 percent and Oil & gas index shed 1 percent. However, selling was also seen in the IT, metal, oil & gas, pharma and PSU banks.

BSE midcap and smallcap indices ended on flat note.

Indian rupee ended 25 paise lower at 79.80 per dollar against previous close of 79.55.

Domestic market remained volatile during the week. While BSE-30 and Nifty-50 returns were flat, the midcap and smallcap space saw interest from market participants. Both, BSE-Midcap and BSE-Smallcap index outperformed the larger peers this week. BSE Capital Goods and BSE Realty indices were key gainers, whereas the BSE IT index remained under pressure.

Auto stock gave positive returns this week amid reporting of August 2022 sales volumes by auto companies. India’s Q1FY23 real GDP grew by 13.5%, aided by private consumption growth.

For August 2022, GST collections remained buoyant and manufacturing PMI was healthy. While the crude oil prices has been volatile, the US 10-year bond yield has gradually moved up to 3.25%. In the near term, Indian markets are likely to continue tracking global peers.

Tamilnad Mercantile Bank has set a price band of Rs 500-525 a share for its initial public offering. Earlier, the firm said its IPO will open for subscription on September 5 and close on September 7.

The IPO is a fresh issue of 1.58 crore shares. On the upper end of the price band, the firm will raise around Rs 831.60 crore from the issue. Axis Capital, Motilal Oswal, SBI Capital Markets are the lead managers to the issue.

The anchor book bidding will start on September 2. Shares will be allotted to dematerialised accounts of successful investors on September 14 and stock will make its market debut on September 15.

On the technical front, Nifty formed a small positive candle with long upper shadow with a long upper shadow which indicates of an upcoming consolidation in the market with volatile trade. However, higher low formation on daily chart indicates of a pause in downward pressure and possibility remains of an upside bounce towards 17750-17800.

On the oscillator front, the 14-period RSI has gained a bullish momentum sustaining above the trend deciding level of 60. Though one need to avoid trading aggressively amid global nervousness.

Considering the present situation, a bare minimum correction of 38.6% of the entire rally from 15,183 to 17,992 comes around 16900 followed by 50% correction at 16600.

On the upside present setup indicates that Nifty can move towards 17,992 followed by 18,114 in the coming days with immediate support stands at 17,350 and index need to sustain above the said level with some authority for the bulls to strengthen their stance. Hence during the day intraday decline towards 17430-17470 can be used for creating long position for the target of 17750.

Foreign broking house Morgan Stanley has kept overweight rating on the stock with a target at Rs 1,100 per share.

The new cashback card could have a wide customer appeal, while cashback costs could be recouped by saving certain costs.

The cashback is a strong tactical move to reduce dependence on partners, reported CNBC-TV18.

SBI Cards & Payment Services was quoting at Rs 932.05, up Rs 3.60, or 0.39 percent.

Crude Oil prices traded higher with benchmark NYMEX WTI crude oil prices rallied by nearly 3% near $89.20 per barrel on Friday. Crude Oil prices climbed on Friday on bets that OPEC+ will discuss output cuts at a meeting on Sept. 5, though benchmarks were on track for a steep weekly decline as fears of China's COVID-19 curbs and weak global growth weighed on the market. The investors remain worried about the impact of the latest COVID-19 curbs in China. The city of Chengdu on Thursday ordered a lockdown that has hit manufacturers like Volvo. We expect crude oil prices to trade sideways to up with resistance at $92 per barrel with support at $87 per barrel. MCX Crude oil September contract has important support at Rs. 7030 and resistance at Rs. 7250 per barrel.