Sensex. Nifty end in green but gains are capped as smallcap stocks lose steam sharply; RIL, Sun Pharma top gainers
4 min read 27 Mar 2023, 05:07 PM ISTAlthough, Sensex and Nifty 50 ended in green, the gains were capped due to heavy losses in small-cap stocks. Healthcare stocks outperformed, while auto, capital goods and consumer durables stocks weighed on the mood.
PremiumIndian markets broadly witnessed a range-bound performance as the First Citizens Bank's acquisition of failed Silicon Valley Bank calmed the Asian and European counterparts on certain degree on Monday. Although, Sensex and Nifty 50 ended in green, the gains were capped due to heavy losses in small-cap stocks. Healthcare stocks outperformed, while auto, capital goods and consumer durables stocks weighed on the mood. Heavyweight Reliance Industries and Sun Pharma were top gainers.
Sensex and Nifty 50 halted two days losing streak on Monday. Sensex closed at 57,653.86 up by 126.76 points or 0.22%, and Nifty 50 edged up by 40.65 points or 0.24% to end at 16,985.70.
RIL was the top gainer, soaring by 1.5% followed by Sun Pharma which was up by 1.2%. Other stocks such as Maruti Suzuki, SBI, Kotak Bank, Ultratech Cement, HUL and Infosys advanced between 0.5% to 1%.
Among the losers, Power Grid and Tata Motors took lead on Sensex with a downside of 1.06% each. Bajaj Finance, M&M, and Axis Bank followed by slipping around a percent each.
In the broader market, BSE SmallCap took massive beating as the index ended lower by nearly 401 points or 1.5%. BSE Midcap index also shed nearly 88 points.
In terms of sectoral indices, BSE Healthcare index rose by 158 points. While Auto and Capital Goods index were top laggards with a drop of nearly 182 points each followed by Consumer Durables index which was down by 169 points.
Ajit Mishra, VP - Technical Research, Religare Broking said, "Markets traded volatile in a narrow range and ended marginally in the green amid mixed cues. After the flat start, Nifty tried hard to inch higher however a sharp cut in the final hour trimmed the gains and it finally settled at 16985.70 levels. Most of the sectoral indices, barring defensive viz. FMCG and pharma, continue to reel under pressure wherein realty, energy and auto were among the top losers. Meanwhile, the broader indices underperformed and shed in the range of 0.5%-2%."
Meanwhile, at the interbank forex market, rupee also performed better compared to its peers aided by dollar inflows and healthier risks. The local unit closed at 82.37 against the US currency compared to the previous session's print of 82.48 per dollar.
On rupee, Jateen Trivedi, VP Research Analyst at LKP Securities said, "Rupee traded in a range between 82.26-82.42 as the currency tries to settle the volatility witnessed last week where Fed's policy gave support to dollar index and weakness to rupee after touching high of 82.05 last week."
On Monday, First Citizens Bank entered into an agreement with FDIC to purchase out the latter's receivership substantially all loans and certain other assets, and assume all customer deposits and certain other liabilities of Silicon Valley Bridge Bank.
The First Citizens Bank and SVB deal came as a comfort for investors who have been in a frenzy selling over fears of contagion in the banking system. The collapse of SVB is the epicentre of the recent banks turmoil.
Going ahead, in domestic equities, Mishra said, "amid uncertain global environment, participants are not reacting positively to any intermediate uptick in world indices and now a fresh decline in the broader markets further adding to their worries. We thus recommend maintaining a check on leveraged positions and let the market stabilize."
For Tuesday, Rohan Shah, head technical analyst at Stoxbox said, "intraday traders can now look for long opportunities above the resistance level of 17,110 if the closing comes above 17,110 in 15 min chart. Traders can look for fresh shorts only if nifty breaks the 16,900 level & remains below for 15 min to ensure short."
Overall, Rupak De, Senior Technical Analyst at LKP Securities said on Nifty, "the trend remains bearish as the benchmark index Nifty continues to stay below the critical moving average. Besides, the bearish crossover of the 21 EMA and the 55 EMA has been boosting the bearish market sentiment. Sell the rally should be the theme for traders as the rallies are getting sold into. On the higher end, sellers may return around 17,250. The current weakness may take the Nifty towards 16,750 over the short term."
Whereas for Bank Nifty, Kunal Shah, Senior Technical & Derivatives Analyst at LKP Securities said, the index bears continued to attack the index from higher levels and the index faced stiff resistance at the 39,800-40000 zone. The index is stuck in a broad range between 39000-40000 and a brake on either side will have trending moves. The monthly expiry has the highest open interest build up at 40000 ce and any trade above this will lead to sharp short covering.
Further, in regards to the domestic currency, Trivedi said, "the rupee shall keep taking cues from Crude price move and FII's data, where in Crude weakness has helped rupee to hold 82.50 but FII's selling has kept pressure in rupee near 82.20 zones. Rupee going ahead can be seen between 82.00-82.75 volatile range."
Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of Mint. We advise investors to check with certified experts before taking any investment decisions.
