Broader markets in sell-off mode; Sensex ends 187 points higher

Small-, mid-caps bleed, even as Sensex ends in green

The benchmark Sensex and the Nifty snapped their three-day losing streak. However, there was little respite for the stocks in the broader market. The mid- and small-cap indices tumbled for a fourth straight day and the market breadth came in at more than two stocks declining for every one advancing.

Thanks to the gains in Reliance Industries (RIL), the benchmark Sensex eked out a 187-point gain to finish at 57,808.6. The Nifty50 Index rose 0.3 per cent to 17,267.

Experts said the gain in select heavyweights overshadowed the pain in the overall markets. The Nifty Midcap 100 fell 0.7 per cent to 29,917. The index has declined 3.4 per cent in the last four sessions. The Nifty Smallcap 100 Index declined 1.7 per cent to end at 10,857, its lowest close since December 24, 2020.

Foreign portfolio investors (FPIs) sold shares worth nearly Rs 2,000 crore on Tuesday, while domestic investors provided buying support of Rs 1,115 crore.

Market observers said FPIs continue to dump stocks in the mid- and small-cap universe, which has outperformed the Sensex last year. They say valuations are yet to turn favourable.

Global markets traded mixed as the 10-year US treasury yield inched closer to 2 per cent. Market experts said after stronger-than-expected January jobs data in the US, investors are eyeing US inflation data due later this week.

Back home, investors are keenly awaiting the outcome of the two-day monetary policy committee (MPC) meeting of the Reserve Bank of India (RBI).

“We’ve been seeing a roller-coaster ride since the Union Budget and the scheduled MPC meet is likely to keep the volatility high. Besides, the global cues are also not portraying a favourable picture. Participants should continue with the cautious stance and limit leveraged positions,” said Ajit Mishra, vice-president-research, Religare Broking.

The RBI meeting comes at a time when oil prices are inching towards $100 per barrel and sovereign yields are tightening.

“The RBI policy outcome on Thursday will be a key driver for the market in the near term as it will impact liquidity and interest rates. Markets are witnessing increasing volatility due to various global, as well as domestic factors,” said Siddhartha Khemka, head-retail research, Motilal Oswal Financial Services.

Technical analysts said the market will remain in a wide trading range, given several uncertainties.

“Investors fear steady withdrawal of quantitative easing and the current pull-out of funds by foreign investors could dampen sentiment. On daily charts, the Nifty has formed the hammer formation, which indicates the indecisiveness between the bulls and the bears. The large trading range would be 17,100-17,400, with 17,150 being the important support level. The index could move up to 17,350-17,400. Below 17,150, the chances of the index hitting 17,100-17,075 remains high,” said Shrikant Chouhan, head of equity research (retail), Kotak Securities.

Among the Sensex components, Tata Steel gained the most at 3.1 per cent, while RIL, which rose 1.6 per cent, made a 116-point contribution to the Sensex gains.