Domestic equity benchmarks the Sensex and the Nifty ended with decent gains on May 10 despite weak global cues ahead of the US retail inflation prints for April.
US stock futures were trading lower while the major European markets, too, were in the red as investors await the US consumer price data which will indicate whether the US Federal Reserve will take a pause on rate hikes or not.
As per Reuters, “April US consumer price data is due at 1230 GMT and economists expect the headline CPI to hold steady at an annual 5 per cent and core CPI to moderate very slightly to 5.5 per cent, though anything stickier could confound bets interest rates will fall.”
The domestic market bucked the global trend as investors remain hopeful about the country’s economic growth. The in-line March quarter numbers of India Inc., too, have underpinned market sentiment. The sustained foreign capital inflow is also a positive factor for the market.
While the Indian market has been underperforming its top global peers this year so far, analysts at Franklin Templeton believe the situation appears to be changing and investors are taking another look at Indian equities.
Sukumar Rajah, Senior Managing Director and Director of Portfolio Management at Franklin Templeton Emerging Markets Equity believes that the recent underperformance may not continue as the market looks attractive and the economy has a high potential for growth.
Sensex opened 82 points higher at 61,843.36 and remained volatile throughout the session. Volatility index India VIX rose over 3 per cent to 13.08 level.
Sensex swung 401 points intraday before closing 179 points, or 0.29 per cent, higher at 61,940.20 while the Nifty clocked a gain of 49 points, or 0.27 per cent, to end at 18,315.10.
Mid and smallcaps also clocked gains; the BSE Midcap index rose 0.34 per cent while the Smallcap index ended with a gain of 0.33 per cent.
As many as 120 stocks, including Tata Motors, ONGC, Indian Oil Corporation, BPCL, AU Small Finance Bank and Siemens, hit their fresh 52-week highs in intraday trade on BSE.
Meanwhile, crude oil prices fell over a per cent ahead of the US inflation data. Concerns over lower fuel demand due to the global economic slowdown have been keeping oil prices under pressure. Brent Crude traded near the $76 per barrel mark.
The rupee, on the other hand, rose 5 paise to close at 81.99 per dollar as the greenback remained volatile ahead of the US inflation data.
Top Nifty Gainers and Losers
Out of the total 50 stocks in the Nifty50 index, 35 ended with gains while 13 suffered losses. Two stocks – Adani Ports and HCL Tech – ended flat.
Shares of IndusInd Bank (up 2.77 per cent), HDFC Life (up 1.80 per cent) and Power Grid (up 1.66 per cent) ended as the top gainers in the Nifty index.
On the flip side, shares of UPL (down 2 per cent), Dr Reddy’s Labs (down 1.30 per cent) and Infosys (down 0.53 per cent) ended as the top losers in the Nifty pack.
PSU Bank Index Top Sectoral Loser
With a loss of 1.06 per cent, the Nifty PSU Bank index ended as the top loser among the sectoral indices, followed by Nifty Metal (down 0.25 per cent), IT (down 0.12 per cent) and Healthcare index (down 0.06 per cent).
Among the gainers, Nifty Media (up 1.36 per cent) stood at the top, followed by Realty (up 0.86 per cent), Oil & Gas (up 0.80 per cent) and Auto (up 0.75 per cent). The Nifty Bank index rose 0.31 per cent higher to 43,331.05.
Expert’s Views on Markets
“The domestic market traded near the flatline, oscillating between gains and losses as investors refrained from taking a firm direction due to the uncertainties surrounding the US market. Globally, investors exercised caution in anticipation of US inflation data and a meeting between US political leaders to discuss fiscal concerns. Oil prices edged lower as industry data revealed a surprise surge in US crude stock, indicating a potential weakness in demand,” said Vinod Nair, Head of Research at Geojit Financial Services.
Technical Views on Markets
Jatin Gedia, Technical Research Analyst, Sharekhan by BNP Paribas pointed out that the Nifty found support at the 20-hour moving average and started to recover during the second half of the trading session and ultimately closed in the green.
“On the daily charts, the Nifty is still hovering around the upper boundary (18,350) of the broad trading range (18,000 – 18,350) and both bulls and bears are trying hard to defend their respective boundaries,” said Gedia.
“On the way down 18,220 – 18,200 is acting as a crucial support zone while 18,330 – 18,350 is acting as an immediate hurdle and the Nifty is witnessing volatile trade within this range. Until we get a decisive close beyond the extremes of this range the sideways price action is likely to continue,” Gedia said.