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Informist, Tuesday, Nov. 19, 2024

By Alina Geogy

MUMBAI – Benchmark equity indices erased most gains made on Tuesday after news reports of Ukraine's attack on Russia sparked concerns about escalation in the conflict between the two countries, analysts said. A short covering-led rally in the first half of the day was short-lived due to worries that the long-standing conflict in the region might worsen.

The indices came off highs as a knee-jerk reaction to the news flows about Ukraine's strike on Russia, Vikas Inder Jain, head of research at Reliance Securities, said. All sectoral and broader market indices were sharply up along with the benchmark indices earlier in the day, but most came off highs and some turned negative after Bloomberg quoted a report by Ukrainian news agency RBC Ukraine that Ukrainian armed forces had carried out its first army tactical missile system strike within Russia. Following the report, the Nifty 50 fell as much as 1.1% or over 260 points from its intraday high and ended at 23518.50 points, up 0.3% or 67.70 points. The Sensex ended at 77578.38 points, up 0.3% or 239.37 points.

There were also reports that Russian President Vladimir Putin had approved a change to the country's nuclear doctrine, allowing a Russian nuclear response to use of conventional weapons. This comes a day after the US approved the use of its long-range missiles by Ukraine against Russian targets. US stock futures and key European indices also fell sharply following the news reports.

There was also caution among investors ahead of the Maharashtra Assembly elections on Wednesday, and the exit polls which could act as a key trigger in the coming days, Jain of Reliance Securities said. The equity market will be shut on Wednesday owing to the elections. Expiry of the weekly options contract of the Nifty Financial Services index, which will also be discontinued henceforth, could have added to the volatility, he said. The discontinuation of the weekly contract of this index is part of several steps being undertaken by the Securities and Exchange Board of India to curb speculative retail participation in the derivatives market.

Though it failed to hold on to most early gains, the Nifty 50 snapped a seven-day losing streak. It had declined over 4% or more than 1000 points in the last seven sessions. The Sensex also broke a four-day long losing run. Gains in the Nifty 50 were led by banking, information technology, and automobile stocks. Shares of Mahindra & Mahindra, heavyweight HDFC Bank, and Infosys closed up 3.6%, 2.2%, and 0.7%, respectively. With the earnings season wrapped up, investors are now buying into those sectors which had comparatively better earnings for the September quarter, such as information technology and banks, analysts said.

Global brokerage firm CLSA maintained an 'outperform' rating on shares of M&M and said it was confident that the successful launch of its new vehicle models would drive growth till at least 2025-26 (Apr-Mar). Shares of NTPC were in focus as the company's wholly-owned subsidiary NTPC Green Energy raised INR 39.60 billion from anchor investors Monday ahead of its initial public offering opening Tuesday. The stock ended flat after rising over 3% earlier in the day.

Shares of Honasa Consumer closed down over 11% and were the worst performer in the Nifty 500 index. Investors sold shares of the company for the second straight day due to disappointment over the company's Jul-Sept earnings. The stock had hit a 20% lower circuit Monday, and has fallen nearly 29% in just two sessions. The fall comes after the company late Thursday reported a net loss for the September quarter, followed by rating downgrades and cuts to target price by some brokerage firms.

Investors are also likely to have tracked the sales by foreign institutional investors, which have slowed over the past few days. FIIs net sold shares worth INR 14.03 billion on the exchanges Monday, as per provisional data. Except for the one-hour Muhurat trading session on Nov. 1, this marks the lowest since Sept. 27, when FIIs sold shares worth 12.09 billion. The benchmark indices had hit a record high on the same date. 

* Of the Nifty 50 stocks, 25 rose, 23 fell, and 2 were unchanged

* Of the Sensex stocks, 17 rose and 13 fell

* On the NSE, 1,687 stocks rose, 1,116 fell, and 67 were unchanged

* On the BSE, 2,410 stocks rose, 1,559 fell, and 90 were unchanged

* Nifty Media: up 2.45%; Nifty Realty: up 1.48%; Nifty Metal: down 0.85%

BSE                                               NSE

Sensex: 77578.38, up 239.37 points or 0.31%       Nifty 50: 23518.50, up 64.70 points or 0.28%

End

Edited by Avishek Dutta

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