Market Wrap: Sensex, Nifty end flat; mid, smallcaps clock strong gains; investors richer by over a lakh crore

Frontline indices the Sensex and the Nifty ended flat on Tuesday (August 22) as gains in shares of select heavyweights such as ITC, Larsen & Toubro and Axis Bank were offset by losses in those of HDFC Bank, ICICI Bank and TCS.

Market sentiment was largely positive mirroring global sentiment. Among global peers, European stocks traded with healthy gains when the Sensex closed flat, even as US Treasury yields soared due to concerns about interest rates remaining elevated for a longer-than-expected period.

"US Treasuries hogged the limelight once again, with benchmark 10-year yields climbing to 4.366 per cent - their highest level since 2007 and up almost 40 bps month-to-date," reported Reuters.

The long-term outlook of the market remains healthy but experts expect the market to remain in consolidation mode in the short term. 

Stock market today

Sensex opened 56 points higher at 65,272.42 against the previous close of 65,216.09 and remained in the green for the most part of the day, although in a range. The index saw selling pressure in the final hour of trade which made it end flat.

Sensex closed 4 points higher at 65,220 while the Nifty closed the day at 19,396, up 3 points.

However, mid and smallcaps clocked strong gains. The BSE Midcap index ended 0.94 per cent higher while the Smallcap index ended with a gain of 0.89 per cent.

The overall market capitalisation of the firms listed on BSE rose to nearly ₹308.36 lakh crore from nearly ₹306.96 lakh crore in the previous session, making investors richer by about ₹1.40 lakh crore in a single session.

Over 250 stocks, including Bharat Electronics, Bharat Forge, Trent, IDFC First Bank, Power Finance Corporation and Polycab India, hit their fresh 52-week highs in intraday trade on BSE.

Top Nifty gainers and losers

As many as 26 stocks ended in the red in the Nifty index while 23 clocked gains.

Shares of Adani Enterprises (up 2.09 per cent), HDFC Life Insurance Company (up 1.53 per cent) and ITC (up 1.47 per cent) ended as the top gainers in the Nifty index.

On the flip side, shares of BPCL (down 1.46 per cent), Cipla (down 1.04 per cent) and Eicher Motors (down 0.82 per cent) ended as the top losers in the index.

Top gainers, losers today: ITC, Jio Financial Services, Bajaj Finserv, NTPC; check full list here

Sectoral indices today

Among the sectoral indices, Nifty Bank ended flat with a negative bias. On the other hand, Nifty Metal (up 0.85 per cent), Nifty FMCG (up 0.66 per cent) and Nifty Auto (up 0.52 per cent) ended with decent gains.

The Nifty PSU Bank index fell 0.49 per cent while Pharma and IT indices slipped 0.20 per cent and 0.11 per cent, respectively.

Experts' views on markets

"Despite the support of positive international markets, Indian equities struggled to maintain their upward momentum due to lingering apprehensions over ongoing global uncertainties. Sectors closely tied to the Western economy, such as IT and pharma, faced challenges, while domestic-oriented sectors, alongside mid- and small-caps, exhibited resilience and gained traction," said Vinod Nair, Head of Research at Geojit Financial Services.

"The influence of higher bond yields and concerns about potential rate hikes in the US is prompting FIIs to withdraw funds from the domestic market, contributing to the market's volatility," Nair said.

"We see the recent rebound as a counter move within the corrective trend as Nifty has multiple hurdles to cross to change the tone. Meanwhile, a mixed trend across sectors is offering opportunities on both sides. Participants should align their trades accordingly while keeping a check on position size," said Ajit Mishra, SVP of Technical Research at Religare Broking.

Technical views on Nifty

Shrikant Chouhan, Head of Research (Retail), Kotak Securities pointed out that the market is witnessing a non-directional activity on the higher side and finding resistance near 19,450, while on the lower side, the index is regularly taking support near 19,375.

"Any fresh uptrend is possible only after the dismissal of 19,450, and above the same the index could rally to 19,500-19,525. On the flip side, dismissal of 19,375 could accelerate the selling pressure and the index could slip to 19,325-19,300,” said Chouhan.

Jatin Gedia, Technical Research Analyst at Sharekhan by BNP Paribas pointed out that the Nifty has not been able to surpass the resistance trendline and has been successful restricting the rise. On the downside, the 40-day moving average (19362) is acting as a crucial support level and absorbing all the selling pressure.

"The Nifty is stuck in a range and until it trades below the 19,450 – 19,500 zone, we can expect the selling pressure to persist. We continue to maintain our negative outlook on the index. On the downside, we expect the Nifty to target the level of 19,100. Crucial support is placed at 19,250 – 19,200 while immediate hurdle is placed at 19,480 – 19,500," said Gedia.

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