Indian benchmark indices ended higher on Thursday, snapping a three-session losing streak after a volatile closing auction session (CAS).
After trading in the red for much of the day, the Sensex’s indicative price briefly jumped nearly 1,000 points to 75,708 on its weekly expiry, while the Nifty 50 surged 330 points to 23,762. Most of the gains evaporated by the final close, with the Sensex ending 138 points higher at 74,903 and the Nifty gaining 46 points to settle at 23,478.
Power Grid and Axis Bank shares gained around 2% each to lead gains on Sensex, while UltraTech Cement, NTPC, TechMahindra and Bharti Airtel shares rose more than 1% each. HDFC Bank, L&T, Kotak Mahindra Bank and Bajaj Finance shares meanwhile gained nearly 1% each. Bucking the trend, HCLTech shares dropped over 2%, while those of Tata Steel, Trent, ITC, Adani Ports, BEL and Maruti Suzuki fell around 1% each.
Broader markets meanwhile remained in the red, with Nifty Midcap 100 and Nifty Smallcap 100 indices falling up to 0.4%. Notably, the closing auction session only affects stocks that are included in the F&O segment, less common in the broader markets.
Among the sectors, Nifty Financial Services, Nifty Bank and a few other indices closed in the green with up to 0.5% gains. Nifty Metal meanwhile dropped 0.65%. The overall market breadth remained negative, with NSE seeing 2,079 declines and 1,466 advances, while 121 stocks remained unchanged.
What lies ahead for Dalal Street?
While Dalal Street took a sigh of relief, caution is warranted. The prospect of synchronised monetary tightening strengthened as higher crude prices and prolonged geopolitical tensions reinforced energy-led inflation concerns, said Vinod Nair, Head of Research at Geojit Investments. He added that investors now await key US inflation data for cues on the rate trajectory. Meanwhile, rising global bond yields, coupled with concerns over a potential yen carry trade unwind amid expectations of a BOJ rate hike and a stronger yen, are likely to keep capital flows into emerging markets under pressure.
The domestic market endured a choppy session on expiry day amid weak Asian cues, as investor focus remained closely tethered to the volatility in crude prices, he said. “Although the strong August equity fund flow data and the moderation in the SIP stoppage ratio lent support to the markets, sentiment was tempered by the depreciating rupee and firming domestic bond yields,” according to the analyst.
The Nifty closed higher as the CAS closing came high following a lacklustre session, said Rupak De, Senior Technical Analyst at LKP Securities. He explained that on the daily timeframe, the index has formed a hammer pattern, suggesting a pause in the recent bearish trend.
“On the lower end, immediate support is placed in the 23,380–23,400 zone. On the higher end, resistance is placed at 23,550–23,600. A sustained move above 23,600 could extend the recovery towards 23,800,” the analyst said.
