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Benchmarck indices turned flat after opening higher on Wednesday ahead of F&O expiry of November series, tracking firm cues from Asian markets as investors tried to cash in from Wall Street’s record run.
Sensex rallied as much as 170 points during early trade while the broader Nifty 50 index reclaimed its crucial 8,000 levels before turning negative.
At 11:34 am, the S&P BSE Sensex was trading at 26,037, up 77 points, while the broader Nifty50 was quoting 8,024, up 22 points. In broader markets, BSE Midcap, Smallcap continued to trade flat.
“Nifty has to hold above 8,000 zones to witness an up move towards 8,080 and 8,150 zones while on the downside immediate support exists at 7,920 zones,” said Anand Rathi Research in a technical note.
“Yesterday’s short covering has given us hopes that the 8,050 region will be taken out today, making way for 8,130 or 8,280. However, this is less likely to be smooth ride, and higher level selling is expected. The 8,280 and 8,360 regions are marked for such a turn, but inability to float above 8,130 could also be considered as a sign towards that end,” Geojit BNP Paribas Financial Services said.
Meanwhile, rupee opened weakest since February and was trading at fresh nine month low, down 20 paise at 68.45 on market volatility and gaining US Dollar.
On Tuesday, foreign institutional investors were net sellers with net equity sell value of Rs 692.85 crore, while domestic institutional investors bought equities worth Rs 1,075.20 crore, provisional data available with BSE suggested.
Sectors and stocks
BSE Metal was the top sectoral gainer and jumped over 2%. Vedanta (3.05%), Hindalco (2.31%) and Tata Steel (1.81%) contributed to the gains.
Asian Paints and Larsen & Toubro were the top gainers on Sensex and were trading 3% higher each.
L&T stock surged after the company reported 84% year on year (YoY) growth in consolidated net profit at Rs 1,435 crore for the quarter ended September 30, 2016 (Q2FY17).
India’s largest engineering and construction company posted profit of Rs 778 crore in the same quarter last year.
Among losers, HDFC dragged the index falling 2.60% while Maruti, Wipro, M&M and Powergrid also fell over 1% each.
Wockhardt hit a fresh 52-week low of Rs 659, down 4.5% on BSE in early morning trade after the company’s UK arm, CP Pharmaceuticals, received a warning letter from the US drug regulator.
Brokerages cut targets
A number of braokerages have cut their targets after Donald Trump won US elections and Narendra Modi’s surprise demonetisation move.
Deutsche Bank cut its December Sensex target to 25,000 from 27,000 and expects the remainder of 2016 to be highly uncertain on global headwinds while Ambit Capital slashed its gross domestic product (GDP) growth estimate for this financial year to 3.8% from 6.8%.
Fitch re-affirmed its "negative" outlook for India's banking sector, saying the financial standing remained "fragile" without bigger capital injections and that the government's action on banknotes could end up having a mixed impact.
GST Exemption
About 80 items are likely to make it to the exemption list under the proposed goods and services tax (GST), including grains, green coconut, poha, unprocessed green tea leaves, and non-mineral water.
Items such as coffee and processed foods like biscuits, rusk, butter and cheese currently exempted from excise duty, may draw GST.
There are currently around 300 items in the exemption list from central excise duty and 90 from the states value added.
Global Markets
Asian stocks bounced to one-week highs on Wednesday as investors tried to share in the exuberance of Wall Street's record run, while high US bond yields kept the dollar well underpinned.
SGX Nifty was gained 0.86% in early trade, indicating a positive start for NSE Nifty.
China's blue-chip CSI300 index advanced 0.6% to a near 11-month peak.
Japan's Nikkei was closed for a holiday after enjoying a five-session winning streak that took it to the highest finish since January.
MSCI's broadest index of Asia-Pacific shares outside Japan also added 0.6%, edging further away from four-month lows hit on Monday.
Emerging market shares have struggled in recent days as surging US bond yields sucked much-needed capital out of Asia.
President-elect Donald Trump's past talk of trade tariffs has also weighed on sentiment in the export-intensive region.
On Wall Street, US stocks extended their post-US election rally that pushed the Dow Jones above 19,000 for the first time. S&P 500 gained 0.22% while Nasdaq added 17.49 points, or 0.33 per cent, to 5,386.35.
(With inputs from Reuters)
