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Informist, Tuesday, Nov. 5, 2024

By Alina Geogy

MUMBAI – A sharp recovery in shares of banks and steady gains in those of metal companies helped the benchmark indices turn positive in the last few hours of trade Tuesday and end higher. Gains in these stocks turned around a session that was choppy earlier in the day and the buying surge helped investors overcome the continuing uncertainty about the outcome of the closely-watched US presidential election.

The Nifty 50 had fallen as much as 0.6%, or over 150 points, during the day, but sharp gains in bank stocks not only ensured a recovery for the index, but also took it up nearly 1%, or 217.95 points, to 24213.30 points at the close of trade. The index recovered around 370.55 points, or 1.6%, from the day's low. Shares of HDFC Bank, ICICI Bank, Axis Bank, and State Bank of India contributed the most to the gains in the Nifty 50. The Sensex, which had similarly fallen as much as 0.6%, ended at 79476.63 points, up 694.39 points or 0.9%. With these gains, the indices have recovered most of the losses from Monday's session.

Investors have been closely watching the nail-biting race between Republican candidate Donald Trump and US Vice-President Kamala Harris of the Democratic Party. They have been cautious ahead of the US election as they are uncertain how the Indian stock market would be affected by the victory of either candidate. "It's become a little too close to call," said Vinit Bolinjkar, head of research at Ventura Securities. "While there is a strong chance of the correction continuing, I would not be surprised if there is a bounce in the market if Trump were to get elected." This is because some believe the conflict in West Asia would come to an end, especially after Trump made comments about resolving those issues. However, analysts have mixed views about the effects of either candidate winning.

Shares of index heavyweight HDFC Bank closed up 2.6% on expectations that the stock's weight in the MSCI Global Standard Index will increase during the quarterly rejig, scheduled to be announced Wednesday. Metal stocks rose 3-5% after news reports said the government may hike the anti-dumping duty on steel imports to support the domestic industry, analysts said. Positive economic data from China hinting at a potential improvement in demand and favourable steel prices, too, may have boosted buying momentum for these stocks, they said. Shares of Tata Steel and JSW Steel closed up 3.6% and 4.7%, respectively.

The anti-dumping duty on imports from countries such as Vietnam and Thailand could help improve domestic demand for metals, especially as construction work goes into full swing in the next few months, Tushar Chaudhari, lead research analyst at Prabhudas Lilladher, said. Some metal stocks, such as Tata Steel, had recently corrected around 15% from record highs, which could have been another factor for buying, he said. Gains in these stocks ensured the Nifty Metal was the sole sectoral index with modest gains for most of the day, when all the other indices were in the red. The Nifty Metal index extended these early gains and ended up nearly 3%, becoming the top gainer among sectoral indices.

Among other sectoral indices, the Nifty Bank had the most notable recovery as it rose 2.6%, or over 1340 points, from its intraday low. The index ended 1.9% higher at 52207.25 points, with 10 of its 12 constituents in the green. All the other financial sectoral indices--Nifty Financial Services, Nifty Private Bank, and Nifty PSU Bank--were among the gainers. On the other hand, Nifty FMCG and Nifty Media fell over 0.2% each and were the worst hit. Both indices fell for the second consecutive session.

All the mid- and small-cap indices registered a similar recovery from their intraday lows. The Nifty Smallcap 50 and Nifty Midcap 100 gained the most among the broader market indices and ended up 0.6%. Over 60% of all stocks traded on the exchanges ended with gains.

While the earnings season is nearing its close, corporate earnings for the September quarter continued to play a role in some stock movements. Shares of Gland Pharma gained 14% and were the best performers in the Nifty 500 index a day after the company posted slightly lower-than-expected on-year decline in its consolidated net profit for the September quarter. Kotak Institutional Equities upgraded the stock's rating to 'reduce' from 'sell' and also raised its target price, according to a CNBC TV18 report. The brokerage believes the company's earnings have now bottomed out, and after a prolonged wait, it has made tangible progress in its biologics contract development and manufacturing organisation business.

Shares of Tube Investments of India closed down nearly 4% to a near-one-month low after the company said its consolidated net profit for the September quarter fell over 22% on year due to higher expenditure. The company also reported its lowest on-year growth in revenue in the last four quarters. Shares of ABB India fell 3% after the company's net profit and revenue for the September quarter fell short of analysts' estimates. Cautious commentary by the company was also a reason for the decline in the stock.

Shares of Afcons Infrastructure, which debuted on the exchanges Monday, extended gains and closed over 4% higher. The stock had closed up over 2% in the previous session after listing on the NSE at a discount of 8% to the issue price.

* Of the Nifty 50 stocks, 11 rose and 39 fell

* Of the Sensex stocks, 8 rose and 22 fell

* On the NSE, 1,761 stocks rose, 1,042 fell, and 80 were unchanged

* On the BSE, 2,468 stocks rose, 1,478 fell, and 112 were unchanged

* Nifty Metal: up 2.8%; Nifty Financial Services: up 2%; Nifty FMCG: down 0.34%

BSE                                               NSE

Sensex: 79476.63, up 694.39 points or 0.9%     Nifty 50: 24213.30, up 217.95 points or 0.9%

End

Edited by Rajeev Pai

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