Share Market Close: Sensex ends 385 points higher, Nifty above 19700 led by banks, financials; FMCG hit

The Sensex and Nifty ended higher for the fifth straight session on Thursday, with both the benchmarks gaining about 0.6% after recovering losses early in the day.

On the Nifty, top gainers included L&T, Coal India, IndusInd Bank and SBI, while ONGC, Tata Consumer, M&M, Sun Pharma, and Britannia were the worst hit.

All sectors except FMCG and pharma were in the green at close, and smaller companies continued to outperform blue-chip stocks. The BSE Midcap Index jumped 0.8% while the BSE Smallcap Index rose 0.4%.

Abbott India has recalled all batches of its popular antacid Digene Gel after customers complained about the product's taste and odour, according to various reports. The Drug Controller General of India (DCGI) has cautioned against using the antacid produced at the company’s Goa facility. Abbott India's stock was down marginally on the news.

United Breweries Limited (UBL), part of the Heineken Company, has appointed Vivek Gupta as managing director and chief executive, effective 25 September, the brewer said in a filing to the exchanges Thursday. Gupta has spent over two decades in leadership and commercial roles at P&G.

Shares of Power Mech Projects shot up over 2.3% after the company told the exchanges that it has received orders worth ₹625 crore from Hindustan Zinc Ltd and Vedanta Ltd.

Shares of Castrol India gained 3.4% after a huge block deal on Thursday. Bloomberg reported that around 1.1 million shares of the company changed hands in a bunch of trades, but did not provide details of the buyers and sellers.

Coal India is trading at ₹272.50, up 16.70 points or 6.53%. The stock has a returned almost 14% in the past year.

European stocks dropped for a seventh day, heading for their longest losing streak since 2018, as economic data from Germany further added to worries over the state of Europe’s biggest economy, Reuters reported.

The Stoxx Europe 600 Index fell 0.4% in London by 8:23 am GST, with nearly of the region’s subindexes declining. Technology and basic resources sectors saw the biggest declines, while construction and materials fell less than the wider benchmark.

Tech stocks slipped after China looked to expand a ban on the use of Apple’s iPhones in sensitive departments to government-backed agencies and state companies. Apple suppliers such as STMicroelectronics NV fell in response to the news.

Ralhan said, "Indian bond yields have moved in tandem with their US counterpart. US bond yields have risen as the economy has held up well despite aggressive Fed tightening. Investors have priced out recession risks from the long end as they expect the Fed funds rate to stay at a higher level. This has put upward pressure on India's bond yields as well. The 10-year yield has held above 7.2%.

"An uptick in domestic inflation has also pushed yields higher. CPI came in at 7.4% in July, much ahead of the RBI tolerance band of 4 to 6%. This was largely due to higher vegetable prices, which the RBI expects to correct in the coming months. However, higher global oil prices and deficient rainfall in August have led to upside risks to the inflation trajectory. In such an environment, the RBI is expected to be cautious."

Larsen & Toubro expects the contribution from private sector projects to be at about a third of its orderbook as investment activity picks up, a senior executive said, according to Reuters. But the contribution is seen staying below the historical peak of 40%, CFO R Shankar Raman added.

L&T, seen as a bellwether for investment in the Indian economy, had a consolidated orderbook of 4.12 trillion rupees ($49.55 billion) as of June 30. Roughly 31-32% of this orderbook came from the private sector, up from 22-23% a year-and-a-half ago, Raman said.

China's exports and imports extended declines in August as the twin pressures of sagging overseas demand and weak consumer spending at home squeezed businesses in the world's second-largest economy, although the falls were slower than expected, according to a Reuters report.

While the trade numbers follow a run of other indicators showing a possible stabilisation in China's downturn, they remain far short of the growth economists anticipated earlier this year when the government abandoned its strict covid curbs.

Exports dropped 8.8% in August year-on-year, customs data showed on Thursday, beating a forecast of 9.2% in a Reuters poll and off a 14.5% drop in July. Meanwhile, imports contracted 7.3%, slower than an expected 9.0% decline and last month's 12.4% fall.

The Shanghai, Hang Seng indices slipped over 1% as markets across Asia remained in the red on Thursday. 

The Sensex was up 9.57 points or 0.01% at 65,890.09, while the Nifty was up 3.30 points or 0.02% at 19,614.30. Tech Mahindra, HCLTech and L&T were among the top gainers.

Chintan Mehta, CEO of Abans Holdings: "Markets were surprised yesterday by the continued strength in the US economy. The ISM Services PMI expanded to 54.5, the highest level since March of this year. This has positively fueled economic optimism and aggravated concerns that the Federal Reserve will keep rates higher for longer.

"Global physically-backed gold ETFs have also witnessed the third consecutive month of outflows, shedding 46 tonnes valued at $209 billion. Gold has struggled to make headway in recent sessions as market participants have shifted their focus and positional bets towards the Dollar index and U.S. Treasuries. As a result, there is continued pressure on the yellow metal.

“Participation in gold has been decreasing as amid declining in gold prices. Overall participation continues to hover at lower levels, which sets the stage for an extended rally in gold once participation increases. We believe gold has become a favourable investment opportunity, at current price levels.”

HCLTech said it has signed a multiyear managed public cloud services agreement with German technology powerhouse Siemens AG. Under the agreement, HCLTech will prioritise the automation of Siemens's public cloud environment. HCLTech's stock was up 1.2% at ₹1,250 on the news. 

Share of Procter & Gamble Hygiene & Healthcare shot up 2.49% to an all-time high of ₹16,804 on the NSE. 

Mid-cap and small-cap companies saw further gains on Thursday, extending their run of outperformance against blue-chip stocks. The Nifty Midcap 100 was up 0.41% and the Nifty Smallcap 100 was up 0.48% around noon while the broader market traded flat. 

Shares of One 97 Communications, traded lower on Thursday after it was reported the company had dropped plans to enter the insurance business. According to a report by CNBC-TV18, Paytm has no plans to explore other financial services at this point and will focus on its core businesses — digital payments and loans.  

Shares of the company were trading at ₹893 around noon, down 0.65%.

In anticipation of the upcoming festive season, gold is expected to see a surge in demand, according to Colin Shah, MD, Kama Jewelry. Despite a stagnant phase in gold prices due to economic challenges in the US, there's optimism that gold demand will surge, he said. This optimism stems from the robust performance of stock markets. The period from September to December traditionally marks an auspicious time, driven by festive and wedding seasons, boosting gold demand, he added.