The Indian indices on August 18 ended a volatile trading session with marginal gains, largely supported by realty, metal, and FMCG names. This made it the eighth successive session of gains for the markets.
At close, the 30-pack BSE Sensex was 38 points or 0.06 percent up at 60,298 while the Nifty ended the day with a marginal gain of 12.25 points or 0.07 percent at 17,956.5.
Earlier in the morning, the markets tracked weak global cues after minutes of the US Federal Open Market Committee meeting showed that the Fed was looking at more rate hikes to tame inflation but the pace of hikes might slow down. That apart, the Fed also acknowledged more explicitly the risk that it might go too far and curb economic activity too much.
However, by the close of the session, markets erased all morning losses and turned positive despite global markets being in the red because of falling crude, commodity prices, and a slower pace of tightening by global central banks. The European stocks recovered from early losses even as Eurozone inflation reached a new record high of 8.9 percent year-on-year in July.
“Following the release of the Fed minutes, domestic equities experienced profit booking amid weak sentiment from global peers”, said Vinod Nair, Head of Research, Geojit Financial Services. “The minutes showed that even while decision-makers were concerned about the impact of aggressive actions, they were in favour of raising rates further”.
ONGC, Dr Reddy’s, UPL, Wipro, and BPCL were the top losers on the Nifty with each losing between 1.73 to 2.94 percent during the day.
Among the gainers, Kotak Mahindra Bank, L&T, Tata Consumer Products, IndusInd Bank, and SBI Life Insurance gained the most, with each of these stocks closing higher between 1.44 to 3.52 percent from their previous closes.
Among sectors, Nifty Realty shone the most as it rose 1.55 percent today. The metal stocks did well and pushed the Nifty Metal index higher by 0.92 percent while the FMCG index gained 0.57 percent. However, Nifty IT was impacted by the fall in US stocks yesterday and was the biggest loser among the sectors, skidding by 0.8 percent. Auto and Pharma were the other top losers with declines of 0.47 and 0.34 percent, respectively.
Stocks & Sectors
On the BSE, the Realty index rose 1.76 percent while BSE Utilities and Power were up 1.09 and 0.96 percent, respectively. BSE IT was the top loser as it lost 0.76 percent during the day.
The broader indices displayed strength today and ended the day on a strong note with both BSE Midcap and Smallcap indices outperforming the benchmarks. The BSE Midcap ended higher by 0.42 percent and BSE Smallcap closed up 0.34 percent.
The India VIX, which indicates the degree of volatility traders expect over the next 30 days, declined sharply by 1.85 percent from 17.68 to 17.35 levels.
A long build-up was seen in IRCTC, Dalmia Bharat, and Adani Enterprises while a short build-up could be seen in SBI Cards, India Energy Exchange, and Dr Reddy’s Labs.
Among specific stocks, a volume spike of more than 650 percent was seen in IRCTC while the counters of BHEL and ICICI Prudential Life Insurance saw a spike of nearly 300 percent.
More than 140 stocks touched their 52-week highs on the BSE including ABB, Adani Enterprises, Adani Power, Apollo Tyre, and Eicher Motors.
Outlook for August 19
Shrikant Chouhan, Head of Equity Research (Retail), Kotak Securities Ltd
The benchmark indices witnessed a volatile trading session today. Among Sectors, Reality and Metal indices outperformed whereas the IT index registered some profit booking at higher levels.
Technically, in the short-term time frame, the index consistently forms higher high and higher low patterns which is broadly positive. But at current levels, investors need to be cautious while adding long positions. For the traders now, 17,850/60,000 would be the key support level, above which, it could hit the level of 18,000-18,070/60,500-60,700. On the flip side, traders may prefer to exit from trading long positions if the index succeeds to trade below 17,850/60,000. Below which, it could slip to 17,750-17,700/59,700-59,500.
Gaurav Ratnaparkhi, Head of Technical Research, Sharekhan by BNP Paribas
The Nifty continues to hold in the green for yet another session. It opened on a negative note on August 18; however, it received support near the 20-hour moving average. The selling pressure was absorbed near the key hourly moving average. Thereon, the index took a leap in the second half of the session. For the last couple of sessions, the index is witnessing a brief consolidation near the 78.6% retracement of the entire Oct 2021 to June 2022 decline. This is a healthy sign for the overall up trend. The index is poised to test the crucial psychological mark of 18,000, which holds the key to a further course of action. The near-term support zone inches upwards to 17,850-17,800.
Ajit Mishra, VP - Research, Religare Broking Ltd
Markets traded in a narrow range on the weekly expiry day and ended almost unchanged, taking a breather after the recent surge. The benchmark opened marginally lower in early trades tracking feeble global cues and remained range bound till the end. Meanwhile, a mixed trend across the sectoral pack and buoyancy on the broader front kept the participants busy.
We’re in the fifth successive week of advance and rotational buying across sectors helping the index maintain the prevailing trend. We’re eyeing 18,100 in Nifty and reiterate our view to continue with the “buy on dips” approach. Participants should focus more on stock selection after the recent surge and focus more on the sectors/stocks which are trading in sync with the benchmark instead of focusing on laggards.
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