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Taking Stock: Market ends flat ahead of US inflation data; metal stocks shine, IT drag

Broader indices performed in line with main indices, with BSE midcap and smallcap indices ending flat

August 10, 2022 / 05:40 PM IST

Indian shares were under pressure as market participants turned cautious ahead of the US inflation data. Gains in capital goods and metals stocks helped the market recover most of the losses to close flat on August 10.

At close, the Sensex ended 0.06 percent down at 58,817.29 and the Nifty 0.06 percent higher at 17,534.80.

"Investors were in a cautious mode in anticipation of the release of US inflation statistics, which will set the tone for the next Fed policy meeting," said Vinod Nair, Head of Research at Geojit Financial Services. The data would be released later in the day.

"The US CPI inflation during July is projected to remain high, in line with June inflation levels. This, along with strong job data, will compel the Fed to keep taking a tough approach to reining in high inflation levels," he added.

Hindalco Industries, UPL, Apollo Hospitals, Coal India and Tata Steel were among the major Nifty gainers. The losers included Bajaj Finance, NTPC, ONGC, HCL Technologies and Adani Ports.

Close

On the sectoral front, the Nifty metal index rose 1.6 percent, while the information technology index shed nearly 1 percent. Selling was also seen in the FMCG, PSU bank and energy names.

Also Read: Hindalco Q1 Results | Consolidated profit jumps 48%, revenue 40% on Novelis super show

Stocks and sectors

On the BSE, capital goods index rose 1 percent and the metal index added nearly 2 percent, while the IT index shed 1 percent.

Broader market performed in line with main indices, with BSE midcap and smallcap indices ended flat.

A long build-up was seen in Tata Chemicals, City Union Bank and Hindalco Industries, while a short build-up was seen in MRF, Granules India and Samvardhana Motherson International.

Among individual stocks, a volume spike of more than 600 percent was seen in Polycab India, Tata Chemicals and Ipca Laboratories.

More than 100 stocks, including Coal India, Indian Hotels, Jyothy Labs, M&M, Lemon Tree Hotels, Bharat Electronics, Tata Elxsi and PC Jeweller, touched their 52-week highs on the BSE.

Also Read: Eicher Motors Q1 result | Consolidated net profit up 2.5 times YoY at Rs 611 crore; revenue jumps 72%

Outlook for August 11

Ajit Mishra, VP-Research, Religare Broking

We reiterate our bullish view on markets and suggest continuing with the “buy on dips” approach until the Nifty holds 17,300.

Global cues, earnings and upcoming macro data will keep the volatility high. Participants should align their positions accordingly and avoid contrarian bets.

Rupak De, Senior Technical Analyst at LKP Securities

The Nifty confirmed the resilience of the uptrend by closing above the previous congestion high on the daily chart. Important moving averages are lying comfortably below the current index value, confirming the uptrend again.

The trend will remain bullish in the short term as long as the Nifty stays above 17,350. A rally towards 17,750-17,800 is likely to attract selling pressure.

Gaurav Ratnaparkhi, Head of Technical Research, Sharekhan by BNP Paribas

The Nifty recently surpassed the 78.6 percent retracement of the April–June decline, which is near 17,500.

Although there is weakness in the short-term momentum indicators, the price action is maintaining an upward trajectory. Minor dips are getting support near the 20- hour moving average.

As long as the index trades above the near-term support zone of 17,360-17,300 it will remain positive in the short term and can test 17,750-17,800.

Shrikant Chouhan, Head of Equity Research (Retail), Kotak Securities

Markets traded in a narrow range with a negative bias for the most part of the trading session, as traders followed global direction and exhibited caution ahead of the key US inflation data. If inflation inches higher, markets worldwide fear that the US Fed would maintain its hawkish stance and hike rates further.

Technically, the support has shifted to 17,450 from 17,350. As long as the Nifty trades above 17450, the uptrend will continue. The index can move up to 17,600-17,650. However, below 17,450, the uptrend would be vulnerable and the index can slip to 17,350-17,300.

Siddhartha Khemka, Head- Retail Research, Motilal Oswal Financial Services

After rising more than 2,000 points from June lows, the Nifty is trading at 20x FY23 PE, which is above its 10-year average, thus offering limited upside in the near term. The market seems to be taking a pause before resuming the rally.

Global and domestic factors will determine the market direction in the days ahead. The US inflation data and the domestic inflation data on August 12 can provide direction to the market. While large caps have already moved up, we expect outperformance from midcaps to continue.

Disclaimer: The views and investment tips expressed by experts on Moneycontrol.com are their own and not those of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.
Rakesh Patil
first published: Aug 10, 2022 04:55 pm
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