Broader markets outperform benchmark indices; BSE Midcap index up 1%

Benchmark indices continue to trade in a narrow range amid volatility with Sensex and Nifty swinging between negative and positive zone.

By 11:30 am, the S&P BSE Sensex was down 34 points at 27,793 and the Nifty50 slipped 4 points at 8,587. Among broader markets, BSE Midcap and Smallcap indices are up over 1% each.

"Yesterday’s sharp falls have rendered the prices attractive, but volatility is likely to step up in the coming days, before easing, ensuring that some of the nearest supports stands the chance of being penetrated. 8555-8600 region is likely to hold prices, and break past the same could spark +100 point moves," adds Geojit BNP Paribas in a technical note.

In the overseas markets, Asian stocks extended losses on Friday as worries about the health of Deutsche Bank weighed on financial shares and as oil prices inched back from near-one month highs on scepticism over OPEC's new plan to curb output.

MSCI's broadest index of Asia-Pacific shares outside Japan lost almost 1% and was on track for a 0.8% drop for the week.

Back home, the rupee recovered 16 paise to 66.69 against the US dollar in early trade on Friday at the Interbank Foreign Exchange market on fresh selling of the American currency by exporters.

BSE IT, Oil & Gas and Realty indices are up almost 1% whereas sectors like Telecom, FMCG and Metal are marginally lower.

Top gainers from the Sensex pack are GAIL, ONGC, Infosys, SBI and Wipro, all up between 1%-2%. On the losing side, Cipla, Adani Ports, Bharti Airtel, HUL and Coal India are down 1%-2.5%.

Among other shares, Sintex Industries surged over 6% on the BSE after the company said that its board approved demerger of custom moulding business and prefab business from the company.

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Updated at 9:55 am

Benchmark indices have turned extremely volatile in early trades with negative bias mirroring weakness among global peers.

On Thursday, suffered steep losses on geopolitical concerns after Indian Army in a press conference yesterday revealed that India conducted surgical strikes against terror launchpads inside Pakistan occupied Kashmir late last night.

By 9:55 am, the S&P BSE Sensex was up 2 points at 27,826 and the Nifty50 slipped 1 point at 8,592.

Broader markets are outperforming the benchmark indices- BSE Midcap and Smallcap indices are up almost 1%.

“After moving up by almost 30% in last six months, market had been looking for some reasons to take a correction. On economic parameters, no negatives had been visible so market seems to have taken recourse to a non-economic reason to take a correction” said Kunj Bansal, ED & CIO, Centrum Wealth Management.”

He further adds, “Yesterday’s correction will be followed by RBI’s monetary policy review on Tuesday, October 4. Taking these two events together, we can witness some kind of consolidation in the market before it takes a fresh direction. Post these events, September quarter results are likely to be good and we should see market sentiment improving accordingly.”

Meanwhile, foreign portfolio investors (FPIs) bought shares worth a net Rs 3413.37 crore yesterday as per provisional data released by the stock exchanges.

On the macro-economic front, the Reserve Bank of India (RBI) on Thursday chided banks for publishing photos of defaulters and guarantors in newspapers even as they may or may not be categorised as “wilful defaulters” going by RBI methodology.

Ahead of the first interest rate review since he took over as RBI Governor, Urjit Patel on Thursday met Finance Minister Arun Jaitley. It is deemed to be customary pre-monetary policy meeting with the Finance Minister.

GLOBAL MARKETS

Asian stocks followed Wall Street lower in early trade on Friday, while oil prices held close to the highest level in almost a month on optimism over an OPEC plan to curb output.

MSCI's broadest index of Asia-Pacific shares outside Japan fell 0.5 percent, on track for a 0.4% drop for the week. It is poised for a 2.2% gain in September, and a 9.5% jump in the third quarter.

Japan's Nikkei retreated 1.5% after sluggish consumption data. It is down 1.7% for the month, but set to end the quarter 5.7% higher.

Wall Street lost about 1% as Deutsche Bank shares slumped to a record low after a report that trading clients had withdrawn excess cash and positions held in the largest German lender.

CORPORATE NEWS & STOCK TRENDS

Top losers from the Sensex pack are Adani Ports, ICICI Bank, Power Grid, HDFC and NTPC, all slumping between 0.5%-1%. On the gaining side, Infosys, Wipro, GAIL, RIL and TCS are up 0.4%-1%.

"We expect the volatility to remain high for next few days, as situation gets clearer on the Indo-Pak front. This, however, is a good opportunity for accumulating select stocks where earnings visibility is high, fundamentals are supportive and only expensive valuations were the concern," adds Gautam Duggad, Head- Research, Motilal Oswal Securities.

Tata Steel plans to add 6 million tonne steel output to its existing 13 mt capacity across two facilities at Jamshedpur and Kalinganagar through brownfield expansion over the next few years. The stock is up over 0.3%.

IDFC Bank, the newest lender in the country that transformed itself into a bank, is all set to complete its one year journey on October 1. In the past few months, the bank has aggressively turned its focus on retail and this is going to be in spotlight for the next few years. Shares of IDFC Bank have rusen over 2%.

Alkem Laboratories has dipped 8% to Rs 1,655 on the BSE in early morning trade after the pharmaceuticals company said it has received 13 observations from the US drug regulator for its manufacturing facility at Daman.

With Reuters inputs