Closing Bell: Sensex, Nifty end flat amid volatility; realty gains, banks drag

Taking Stock: Nifty falls 105 points from day's high to end flat as banks underperform

Top gainers on the Nifty included Tata Steel, Maruti Suzuki, M&M, Eicher Motors and Infosys, while the top losers were Power Grid Corporation, SBI, BPCL, Dr Reddy's Laboratories and Hero MotoCorp... Read More

Nifty barely managed to close higher for the third consecutive session on Aug 30. At close, Nifty was up 0.02% or 4.8 points at 19347.5. Volumes on the NSE came back to being normal. Broad market indices outperformed the Nifty even as the advance decline ratio stood high at 1.85:1.

Global shares started higher on Wednesday, boosted by a Wall Street rally that came on positive reports on consumer confidence and job openings. However European stocks fell after the latest round of price data suggested inflation may not yet be fully on the retreat in the euro region. Asian markets too gave up some of their morning gains.

Non-food bank credit rose 19.7% year-on-year to over Rs 148 lakh crore as on Aug. 11, primarily driven by the merger between Housing Development Finance Corp. and HDFC Bank Ltd. The credit growth number would have been 14.8% without taking the $40-billion merger into account. This is below the trend of over 15% banks have been recording over the last year or so.

Nifty closed higher on Aug 30 but failed to hold on to most of the intraday gains. It has formed a bearish counter attack line; however as this comes after a small rise, the bearish impact is limited. Nifty could now stay in the 19306-19472 band for the near term
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The Nifty opened the gap up however as the day progressed it faced selling pressure and closed marginally in the green up ~5 points. On the daily charts, we can observe that the Nifty faced resistance at the zone of 19430 – 19450 which is the confluence of the 20-day moving average and also the 61.82% Fibonacci retracement level 19449 of the fall from 19584 – 19229. The daily and the hourly momentum indicator has a positive crossover which is a sell signal. Thus, both price and momentum indicators suggest that it has started the next leg of the fall. Overall, we shall continue to maintain our negative outlook on the index for the target of 19100. In terms of levels, 19250 – 19220 is the crucial support zone while 19420 – 19450 shall act as an immediate hurdle zone.

The pullback rally in Bank Nifty has fizzled out at the 44800 – 44900 zone where resistance in the form of the 78.6% Fibonacci retracement level (44780) of the fall from 44950 – 43984 was placed. The daily and the hourly momentum indicators provide divergent signals and hence a consolidation is likely. It has decisively closed below the 20- and 40-day moving averages which is a sign of weakness. Overall, we expect the Bank Nifty to trade with a negative bias for targets of 43600 – 43500.

Domestic equities started on a strong note on the back of positive global cues. However, it witnessed profit booking in the last hour leading to Nifty giving up all its gains and closing flat at 19347. Broader market outperformed and continued its northbound journey with the Nifty midcap 100 up 0.7% and the Nifty smallcap 100 up 1%. Sectorially it was a mixed bag with buying seen in Realty, Metals, IT, Auto, and FMCG.

Indian equities were positive for a major part of the day on account of the rally in the global markets on the increasing possibility of the US Fed taking a pause in its upcoming policy meet in September after the country reported weaker jobs data and falling consumer confidence. Locally, the market would keenly await the GDP data which is likely to remain strong. However, given mixed global cues and derivatives monthly expiry, Nifty is likely to remain in consolidation mode while sector rotation would lead to stock-specific action.

Markets traded volatile and ended almost unchanged amid mixed cues. After the gap-up start, the Nifty oscillated in a narrow band and selling pressure in the final hours trimmed all the gains. Consequently, it closed around the day’s low at 19,347.45 levels. Meanwhile, a mixed trend continued on the sectoral front wherein metal and realty posted decent gains while energy and banking remained subdued. However, the continued buoyancy on the broader front was the major highlight of the day.

Nifty has failed again to reclaim short term moving average i.e. 20 EMA despite positive global cues and this indicates bears are not in the mood to loosen their grip. We thus reiterate our view to maintain a negative view on the index and stay stock-specific citing the prevailing outperformance of the broader indices.

Positive sentiment initially propelled domestic equities, buoyed by softer US labour market data that caused a retreat in US bond yields, alleviating concerns about rate hikes. This positive outlook was reinforced by Chinese banks' move to reduce existing mortgage rates, favourably impacting Indian metal stocks. However, gains were tempered as the day progressed, primarily due to weakness in global markets attributed to lacklustre economic data from Europe. Banking stocks bore the brunt of this downturn, while mid- and small-cap segments displayed resilience amid the market dynamics.

Markets were extremely choppy towards the closing hours and erased most of their early gains to end marginally higher, as investors resorted to profit-taking in select stocks ahead of tomorrow's monthly F&O expiry. Traders are unsure how things will pan out in the near term given the mounting challenges like further rate hikes, higher inflation levels and slackening demand growth in China. So a mix of subdued trend to extreme volatility could be the theme for some more time.

Once again, the markets failed to sustain at higher levels. After a strong opening, the Index moved higher but weakness in the Banking sector resulted in a reversal of trade and Nifty50 erased all its gains; however, ended the day with minor gains of 4.80 points at 19,347.45.

The Realty and Metal segments and selected Auto stocks continue to witness buying interest while apart from Banking, Energy sector is also added to the list of underperformers.

Mid and Smallcap indices extended their outperformance with healthy gains of 0.73% and 1.03% respectively.

Nifty50 continued to face stiff resistance at 19,440 and was not able to surpass its 20 & 50DMA which comes around the mentioned levels while for the time being the downside is protected at 19,250.

Indian rupee ended flat at 82.73 per dollar on Wednesday against Tuesday's close of 82.70.

: The benchmark indices ended on a flat note in the highly volatile market on August 30.

-Overweight rating, target at Rs 1,125 per share
-Industry spending growth was 25% YoY in July
-Company rose faster YoY, lost market share as MoM growth was slower than industry
-Company grew marginally slower, up 1.2% versus 1.3% MoM growth for industry

Indian Rupee appreciated on Wednesday on positive domestic equities and a soft US Dollar. However, the surge in crude oil prices capped sharp gains. The US Dollar declined on Tuesday as JOLTS job openings and CB consumer confidence data from the US missed forecasts significantly. This raised expectations of a rate hike pause by the US Federal Reserve in its September FOMC meeting.

We expect the Rupee to trade with a slight negative bias on rising crude oil prices and expectations that the US Dollar may bounce back from lower levels. However, a rise in risk appetite in global markets may support the domestic unit. Traders may take cues from GDP, goods trade balance, pending home sales and ADP jobs data today. Investors may remain cautious ahead of India’s manufacturing PMI and GDP data later this week. USDINR spot price is expected to trade in a range of Rs 82.40 to Rs 83.

The Board of Directors of NTPC has accorded investment approval for Lara Super Thermal Power Project, Stage-II (2x800 MW) at an appraised current estimated cost of Rs 15,529.99 crore.