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Informist, Tuesday, Dec. 10, 2024

By Alina Geogy

MUMBAI – The benchmark indices closed flat Tuesday as gains in most banking and information technology stocks were offset by a fall in shares of Reliance Industries and Bharti Airtel. The index struggled to find direction as index heavyweights moved in opposite directions, Vatsal Bhuva, technical and derivatives analyst at LKP Securities, said. The lacklustre close was probably due to the lack of domestic triggers and expensive stock valuations, according to analysts.

The indices were higher in early trade owing to a rise in banking and IT stocks. However, they turned negative midway through the session as losses in some heavyweight oil and telecommunication stocks began to weigh on them and offset the gains in IT stocks. The intraday fall had the Nifty 50 declining nearly 170 points, or 0.7%, from its intraday high to its lowest level of the day. Finally, the Nifty 50 closed at 24610.05 points, just 8.95 points lower than Monday's close. Meanwhile, the Sensex closed at 81510.05 points, up 1.59 points.

Shares of major banks ICICI Bank and State Bank of India and those of IT firms Infosys and HCL Technologies were the top supporters of the index. On the other hand, shares of Reliance Industries and Bharti Airtel weighed on the index. The choppy movement in the benchmark indices was in line with analysts' expectations, who are of the view that the index needs to consolidate some more before any decisive movement.

"Some consolidation is being seen in the Nifty 50, while the broader market is nearing its all-time high," Bhuva of LKP Securities said. While the benchmarks ended flat, the broader market was not so lacklustre, as mid- and small-cap stocks gained. Of all stocks traded on the NSE, nearly 50% ended higher and around 47% ended down.

"Despite the consolidation, the continued buoyancy in mid-cap and small-cap stocks is encouraging," Ajit Mishra, senior vice-president of research at Religare Broking, said in a note. "Additionally, rotational participation across most sectors is sustaining the positive sentiment during this phase," he said.

Some analysts also believe that the rise in select broader market stocks was probably due to buying by overseas investors who are putting some money back into the market following a recent record sell-off. Foreign institutional investors had sold shares heavily over the last two months. Large-cap and mid-cap stocks mostly bore the brunt of the sell-off as foreign investors have significant holdings in these packs, Bhuva of LKP Securities said. Now, the mid-cap stocks seem to be rising along with the resurgence in buying by foreign investors, he said.

Some fast-moving consumer goods stocks rose slightly and recouped some losses from the previous day, when investors sold them on worries about weaker-than-expected earnings for Oct-Dec and margin pressure. Shares of Godrej Consumer Products rose slightly, but those of Tata Consumer Products, Hindustan Unilever, and Nestle India extended their fall to a second day.

Shares of Swiggy closed up 1.3%, off the day's high after rising almost 6% after global brokerage CLSA initiated coverage on the stock with an 'outperform' rating and a target price of INR 708, as per various news reports. The target price implied an upside of nearly 32% from the closing price Monday. Swiggy has significant growth potential as it addresses a large total addressable market for food delivery and quick commerce, CLSA said, according to a report on ET Now. Quick commerce in India is expected to grow six times by 2026-27 (Apr-Mar), according to CLSA.

Shares of Oracle Financial Software Services closed nearly 3% lower and were among the worst hit in the Nifty 200 index. Oracle Financial's US-based parent Monday posted lower-than-expected earnings for the November quarter, hit by stiff competition among database and cloud service providers, according to media reports. While some analysts said the fall in the stock could have been triggered by the parent company's weak earnings, others said it was due to possible profit sales after a recent rise in the stock price.

Shares of PB Fintech closed up nearly 2% after HSBC Global Research initiated coverage on the stock with a 'buy' rating. The research firm also assigned a target price of INR 2,550 for the stock, indicating an upside of 19% to its closing price on Friday. The company operates Policybazaar, the country's largest online insurance marketplace, and has a 93% market share in the segment, HSBC said in a report.

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

* Of the Sensex stocks, 16 rose and 14 fell

* On the NSE, 1,438 stocks rose, 1,367 fell, and 80 were unchanged

* On the BSE, 2,019 stocks rose, 1,945 fell, and 129 were unchanged

* Nifty Realty: up 1.4%; Nifty IT: up 0.8%; Nifty Media: down 0.7%

BSE                                               NSE

Sensex: 81510.05, up 1.59 points                  Nifty 50: 24610.05, down 8.95 points or 0.04%        

End

Edited by Rajeev Pai

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