Metals, financials, IT drag; auto, FMCG, pharma in focus

Mumbai, May 13

The benchmark indices erased all intraday gains to close lower for the sixth consecutive session on Friday.

The markets rebounded with a positive start at the open, tracking gains in the Asian markets. However, the indices erased all gains during closing hours to end lower, dragged largely by metals and financials.

The BSE Sensex closed at 52,793.62, down 136.69 points or 0.26 per cent. It recorded an intraday high of 53,785.71 and a low of 52,654.89. The Nifty 50, which breached the 16,000-mark intraday, recording an intraday high of 16,083.60, slipped 25.85 points or 0.16 per cent to close at 15,782.15. It recorded an intraday low of 15,740.85.

Breadth turns postive

The market breadth turned postive with 2,166 stocks advancing on the BSE as against 1,169 that declined, while 137 remained unchanged. Further, 12 stocks hit the upper circuit as compared to the seven stocks that were locked in the lower circuit. Besides, 116 stocks touched a 52-week low, and 51 touched a 52-week high.

Investors remain cautious owing to rising inflation and concerns regarding further monetary tightening. Further, India’s CPI inflation for April rose to an eight-year high of 7.79 per cent, while March 2022 IIP stood  at 1.9 per cent.

Vinod Nair, Head of Research at Geojit Financial Services said, “High domestic inflation data failed to spook investors since the recent sell-off has already absorbed the ongoing uncertainties in the market.”

“The domestic markets witnessed a rebound as buyers took advantage of the recent correction following the trend in the global market. However, the weakness in the banking sector triggered a late sell-off. The US Fed cautioned against an aggressive policy stance in order to bring inflation under the Fed’s comfort zone of 2 per cent,” added Nair. 

According to Shrikant Chouhan, Head of Equity Research (Retail), Kotak Securities, “The global and domestic equity markets saw a sharp decline this week as investors are worried about growth expectations amid elevated inflation levels. Almost all the sectoral indices reported a decline this week.”

“FII’s continued to sell Indian equities. Rising bond yields, high inflation levels and monetary policy tightening action by central banks globally will weigh on near-term sentiment, which could keep markets volatile. Stock specific action will continue due to the ongoing results season,” said Chouhan.

Tata Motors, Sun Pharma, Mahindra & Mahindra, Hindustan Unilver and Titan were the top gainers on the Nifty 50, while Hindalco, State Bank of India, JSW Steel, ICICI Bank and Bharti Airtel were the top losers. 

Metals, financials, IT, drag

On the sectoral front, while financials, IT and realty dragged, auto, FMCG, consumer durables, pharma and healthcare gained.

Nifty Metal closed over 2 per cent lower. Nifty Bank and Nifty Financial Services were each down over 1 per cent at closing. Nifty Private Bank was down 0.75 per cent. Nifty IT was down 0.44 per cent, while Nifty Realty was down 0.27 per cent. 

Meanwhile, Nifty Auto closed over 2 per cent higher. Nifty FMCG and Nifty Pharma were each up nearly 2 per cent. Nifty consumer durables and the Nifty Healthcare Index were each up over 1 per cent. 

Broader indices outperform

The broader indices closed in the green, outperforming the benchmarks.

The Nifty Midcap 50 was up 0.48 per cent, while Nifty Smallcap 50 was up 1.23 per cent. The S&P BSE Midcap was up 0.79 per cent, while the S&P BSE Smallcap was up 1.28 per cent. 

The volatility index softened 3.21 per cent to 23.49.

Published on May 13, 2022