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Informist, Friday, Sep 27, 2024

By Noel John

MUMBAI – Headline equity indices ended lower as investors booked profits after the Nifty 50 and BSE Sensex touched fresh record highs today. The Nifty 50 index snapped a six-day winning streak, after notching fresh record highs every single day this week. Indices were largely volatile in early trade and fell sharply in the second half as outflows from banking stocks weighed it down.

The Nifty 50 ended 0.1% lower at 26178.95 points and the Sensex ended 0.3% lower at 85571.85 points. The Nifty 50 and Sensex hit all-time highs of 26277.35 points and 85978.25 points, respectively.

On the technical front, the Nifty 50 is still well-placed on multiple chart frames, said Vipin Kumar, senior technical and derivatives analyst at Globe Capital Market. However, the possibility of some profit-taking cannot be ruled out at this juncture, Kumar said. "Going ahead, we suggest traders to maintain buy-on-dips trading approach till it is holding above 25850 levels on closing basis," he added. 

The market is expensive and is looking for triggers, Saral Seth, vice president of institutional equities at IndSec Securities, said. Jul-Sep will likely see a muted earnings quarter for domestic giants and thus should entail market movement downwards, Seth said. "Even though the indices are expected to take a breather after the recent rally, strong liquidity will continue to keep the markets positive, barring a few episodes of correction," Amish Shah, research analyst at Taurus Corporate Advisory Services, said.

A sharp sell-off seen in banking stocks dragged the indices lower, despite decent gains in information technology, metal, pharmaceuticals, and oil and gas stocks. The Nifty Bank index has been on a roll for the last 15–20 days, hence a profit booking was long due, Seth of IndSec Securities said. The Nifty Bank index ended higher in 12 out of the last 15 sessions and gained over 6% during this time period. 

Shares of ICICI Bank, HDFC Bank, and Kotak Mahindra Bank were the worst performers in the Nifty 50 index today. Since the rebalancing of the Nifty 50 is today, ICICI Bank, HDFC Bank, and Kotak Mahindra were expected to see fund outflows, Seth said. According to a Nuvama report, ICICI Bank, HDFC Bank, Bandhan Bank, and Kotak Mahindra will likely see fund outflows in the semi-annual rejig of Nifty indices, due today.

As per the Nuvama report, the weight of Kotak Mahindra Bank, ICICI Bank, and HDFC Bank on the Nifty Bank index will go down after the Nifty indices rejig. Owing to the fall in these shares, the Nifty Bank index was down 1%, becoming one of the few sectoral indices in the red. 

On the other hand, shares of oil marketing companies were the top gainers today, with those of Bharat Petroleum Corp ending 6.4% higher. The stock hit an all-time high of 370.50 rupees and was the top gainer in the Nifty 50 index. Shares of oil marketing companies rose as crude oil prices continued to decline and are expected to remain weak after the news of an increase in production by Saudi Arabia, Ajit Mishra, senior vice president of research at Religare Broking, said.  

Crude oil prices fell after reports said that Saudi Arabia, the world's largest exporter of crude oil, is willing to abandon its unofficial $100-per-barrel price target and increase production in December, even if it results in continued lower prices. The development follows the planned increase in oil production by the Organization of the Petroleum Exporting Countries and allies set to begin in December after a two-month wait.

Shares of metal companies extended gains, with Hindalco Industries, National Aluminium Co, Vedanta, and Tata Steel ending higher. Investor sentiment towards metal stocks improved on expectations that demand for metals would increase after China's latest stimulus measures to boost its economy. 

The People's Bank of China cut its seven-day reverse repurchase rate and lowered the reserve requirement ratio for banks. The central bank had said it would cut its key interest rate and lower the amount of cash that banks need to hold in reserve in a bid to free up more resources for lending. 

Among the other sectors, there was strong buying interest in information technology stocks following Accenture's upward revision of revenue growth guidance for 2024-25 (Sep-Aug). The US-based company also reported higher-than-expected revenue for the August quarter, backed by demand for artificial intelligence-related services. However, profit bookings in the second half dragged these stocks off their highs.

Strong buying interest was also seen in sugar manufacturing companies. Shares of Shree Renuka Sugars and Balrampur Chini Mills were the top gainers in the Nifty 500 index. These stocks rose today after Food Minister Pralhad Joshi said the government was considering raising ethanol prices and the minimum selling price for sugar. The potential price hike is a symbolic positive for sugar companies as current sugar prices are much higher than the prevailing minimum selling price, said Shailesh Kanani, research analyst at Centrum Broking.

Shares of SJVN rose sharply in the second half of the session after the company said it signed two memoranda of understanding with the government of Maharashtra for pumped storage projects and floating solar projects. The investment required for the projects will be around 480 bln rupees, the company said. 

* Of the Nifty 50 stocks, 29 rose and 21 fell

* Of the Sensex stocks, 16 rose and 14 fell

* On the NSE, 1,418 stocks rose, 1,390 fell, and 84 were unchanged

* On the BSE, 1,979 stocks rose, 1,957 fell, and 124 were unchanged

* Nifty Media: down 1.6%; Nifty Realty: down 1.2%; Nifty Oil & Gas: up 2.4%

BSE                                               NSE
Sensex: 85571.85, down 264.27 points or 0.3%      Nifty 50 26178.95, down 37.10 points or 0.1%

End

Edited by Saji George Titus

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