The benchmark indices ended marginally higher in yet another volatile session on January 31, a day ahead of the presentation of the Union Budget 2023 which turned investors cautious.
At close, the Sensex was up 49.49 points or 0.08 percent at 59,549.90, and the Nifty was up 13.20 points or 0.07 percent at 17,662.20.
After a positive opening, the market came under pressure in the first half with the Sensex and the Nifty sinking to the day's lows of 59,104.59 and 17,537.55. They made a recovery but remained volatile in the second half.
"The Indian market has been underperforming compared to the rest of the world because it has been trading at premium valuations, which are in contrast to the moderation forecasted in the domestic economy for FY24," said Vinod Nair, Head of Research at Geojit Financial Services.
The premiumisation has tapered, currently trading in-line with developed markets like the US but at a premium to other emerging markets.
"The Adani saga has prolonged the correction, as FII selling has increased. Now the focus is on the outcome of the budget and Fed policy, on which the market has a mixed view," Nair added.
Adani Group Stocks mixed
The Adani group stocks witnessed huge selling in the week gone by, post publication of a report by Hindenburg Research, however, some of the group stocks show some recovery on the final day of Adani Enterprises follow-on public offer (FPO), in which Abu Dhabi's International Holding Company (IHC) will invest USD 400 million.
Also Read: Adani Enterprises FPO fully subscribed on Day 3
On January 31, Adani Enterprises, Adani Transmission, Adani Ports and Special Economic Zone and Adani Green Energy rose 2-3 percent, while Adani Total Gas, Adani Power and Adani Wilmar locked at lower circuits.
Stocks and sectors
M&M, SBI, UltraTech Cement, Adani Ports and Adani Enterprises were among the top gainers on the Nifty, while losers were Bajaj Finance, TCS, Tech Mahindra, Britannia industries and Sun Pharma.
On the sectoral front, the Nifty energy index added 1 percent, the auto index rose 1.9 percent, the metal index gained 1.5 percent and the PSU Bank index added 4 percent. On the other hand, information technology and pharma indices shed a percent each.
The BSE midcap index gained 1.4 percent and the smallcap index rose 2.2 percent.
On the BSE, auto, capital goods, power, metal and realty indices added 1-1.8 percent, while selling was seen in the healthcare, information technology and oil & gas stocks.
More than 100 stocks touched their 52-week low on the BSE including Thyrocare Technologies, Quess Corp, Pfizer, Unitech, Whirlpool Of India, Zydus Wellness, Sintex Industries, Hester Biosciences, Gateway Distriparks, Gateway Distriparks and Aurobindo Pharma.
On the other hand, Mahindra & Mahindra, Gravita India, Indian Bank, Jindal Saw, KPIT Technologies, Ratnamani Metals and Surya Roshni.
Among individual stocks, a volume spike of more than 200 percent was seen in Syngene International, Godrej Consumer Products and Sun Pharma.
A long build-up was seen in Intellect Design Arena, Bajaj Finance and Vodafone Idea. A short build-up was seen in Bharat Electronis, Gail India and Exide Industries.
Also Read - Economic Survey 2023 key highlights: GDP growth for FY24 at 6-6.8 per cent, higher CAD
Outlook for February 1
Gaurav Ratnaparkhi, Head of Technical Research, Sharekhan by BNP Paribas
In the case of Nifty, a gap up opening on January 31 was followed by a steep selling pressure in the beginning of the session. Nevertheless, the index managed to recover as the day progressed & closed in the green.
With this bounce, the index is heading towards the level of 17,800, which holds the key for further course of action from a short term perspective.
If the index manages to surpass 17,800 then it will be poised for a larger up move. Till then a consolidation in the range of 17,400-17,800 is possible.
Shrikant Chouhan, Head of Equity Research (Retail), Kotak Securities
Key indices eked out modest gains in an extremely volatile trading session, as investors resorted to profit-taking ahead of the Union Budget announcement. Also, the US Federal Reserve meeting on interest rate decision overnight tomorrow prompted investors to take selective bets with a cautious stance.
Technically, the Nifty found resistance near 17,750. As long as the index is holding the 17,500 support zone, the pullback formation is likely to continue.
Above the same, the index could move up to 17,800-17,850. On the flip side, below 17,500, the market may witness a sharp selloff and on further correction, the index could slip till 17,400-17,350.
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