Sensex, Nifty end marginally higher; Yes Bank jumps 4%

Indian benchmark indices Sensex and Nifty ended marginally higher on August 16 as intraday gains registered by ITC, Axis Bank and Maruti Suzuki were largely offset by losses in Tata Consultancy Services, Reliance Industries and HDFC shares.

The market remained choppy throughout the session as sentiment remained fragile on lingering concerns over a slowdown in the economy, lacklustre June quarter earnings and weak global sentiment in the light of US-China trade war.

Experts opined that the upward movement in the near future will remain capped due to weak consumer demand and uninspiring earnings.

“Consumer demand has continued to weaken in recent months. The earnings season was not encouraging either and brokerage houses will soon scale down their full-year Nifty and Sensex earnings. This will restrict upside for the market in the near term,” said Sanjeev Zarbade, VP PCG Research, Kotak Securities.

Sensex closed the day 38.80 points, or 0.10 percent, higher at 37,350.33, while the NSE benchmark Nifty ended at 11,047.80, up 18.4 points, or 0.17 percent.

The broader market ended in the green too with BSE Midcap and Smallcap adding 0.10 percent and 0.11 percent, respectively.

For the week, both Sensex and Nifty declined by 0.6 percent.

Among the sectoral indices on BSE, utilities, auto and power climbed over 1 percent, whereas IT, tech, consumer durables and energy declined over half-a-percent.

Stocks in news:

Shares of Yes Bank climbed 3.79 percent on BSE after media reports suggested that the company is planning to raise an additional $ 600 million after the success of its qualified institutional placement (QIP) that helped it mop up $ 270 million.

After falling almost 10 percent intraday, shares of Indiabulls Housing Finance witnessed some buying near the end which helped it close at Rs 551.10, down by just Rs 0.20, or 0.04 percent on the BSE. Moody’s Investors Service on August 14 downgraded Indiabulls Housing’s long-term corporate family rating to Ba2 from Ba1 and changed its outlook to negative from stable.

Shares of Sadbhav Engineering fell 5.98 percent to settle at Rs 125 on the BSE as Kotak Institutional Equities slashed its target price by 30 percent after subdued earnings in Q1.

Shares of Indraprastha Gas (IGL) jumped 3.35 percent to close at Rs 327.05 on the BSE after the company reported a 24 percent rise in June quarter net profit on higher sales volume.

Falling to an 8-year low, shares of Glenmark Pharmaceuticals fell as much as 5.94 percent on BSE to end at Rs 361.10 as global brokerages cut price target citing weak June quarter earnings. CLSA maintained sell recommendation on the stock and slashed the target price sharply to Rs 350 from Rs 500, citing that earnings growth will remain under pressure.

Global update:

World stocks rose on August 16 as expectations of a further stimulus by central banks bolstered, offsetting worries about slowing economic growth, which intensified this week as the US yield curve inverted for the first time since 2007, Reuters reported.

European shares opened higher, with the pan-European STOXX 600 index 0.7 percent higher and the trade-sensitive DAX index outperforming.

Japan’s Nikkei ended 0.06 percent higher and Shanghai blue chips rose 0.3 percent, on hopes that Beijing would roll out a programme to boost disposable income.

MSCI’s All Country World Index, which tracks equities across 47 countries, was up 0.2 percent on the day. It was still set for its third straight losing week, down 2.2 percent.

Stocks in Asia ended mixed on August 16 as investors watched yields on longer duration US Treasuries as well as for developments on the US-China trade front.

Technical view:

Nifty remained range-bound throughout the week and formed an inside bar on the weekly chart. The breakout levels in either direction are 11,182 and 10,782.

The larger structure shows that the pattern is likely to break out on the downside. The detailed structure i.e. the daily chart shows that the index is forming a triangular pattern, which can continue for some more time.

“Once the sideways action, which is wave-iv as per the Elliott Wave theory, is done then we can witness the next leg towards the south,” said Gaurav Ratnaparkhi, Senior Technical Analyst, Sharekhan by BNP Paribas.

The hourly chart reveals that a falling trend-line put a cap on the upside on Friday for the fourth straight session. On the other hand, a rising trend-line is acting as a support for the index.

“The breach of the swing low of 10,901, which is also the breakout level for an arrow pattern formed on the daily chart, would be the first sign of the next leg down. On the downside, the recent low of 10,782 will be the initial target whereas the larger target is at 10,455, which is 78.6 percent retracement of the October – June rally,” Ratnaparkhi added.Subscribe to Pro and gain access to curated markets data, trading recommendations, equity analysis, investment ideas, insights from market gurus and much more. Get PRO for 1 year at price of 3 months at 289. Use code FREEDOM.