Sensex, Nifty erase most gains to end marginally higher

After jumping 369 points intraday, Sensex cooled off to close with a nominal gain of 52 points on August 19, mostly due to losses in shares of select heavyweights, including HDFC Bank, State Bank of India and ITC.

The market remained in the positive terrain throughout the session, in sync with major global peers, which rose on hopes of stimulus measures by central banks, but experienced bouts of volatility in the late afternoon session as investors used the opportunity to sell some of their holdings.

“The market failed to hold altitude as concerns over weakening economy persist. Moreover, delay in a formal announcement by the government about the fiscal stimulus is also making investors nervous,” said G. Chokkalingam, Founder, Equinomics Research & Advisory.

Observers have a dull outlook on the market.

“While there are no key domestic triggers in the near-term, the focus will now be on economic recovery and any stimulus or measures from the Indian government may boost sentiments. We remain cautious on the markets in the near-term until there are visible signs of earning recovery,” said Ajit Mishra Vice President, Research, Religare Broking.

Sensex ended the day at 37,402.49, with a gain of 52 points, or 0.14 percent, while Nifty settled at 11,053.90, up 6 points, or 0.06 percent.

Reliance Industries, ICICI Bank, HDFC, Larsen & Toubro and Axis Bank were among the stocks that underpinned Sensex.

BSE Midcap and Smallcap indices outperformed benchmark Sensex, logging gains of 0.20 percent and 0.51 percent, respectively.

Among the sectoral indices on BSE, oil & gas, metal, auto, utilities, basic materials, FMCG and finance ended in the red. On the other hand, consumer durables, capital goods, industrials and healthcare logged gains between 1.57 percent to 0.56 percent.

Stocks in news:

Microfinance lender Spandana Sphoorty Financial made a tepid debut in the market. After listing at a 4 percent discount to its issue price of Rs 856, the stock closed at Rs 848.40 on BSE, down Rs 7.60 or 0.89 percent.

Shares of Ujjivan Financial Services fell nearly 8 percent intraday but recouped losses to end 1.32 percent down at Rs 280.35. Shares of the company came under pressure after its decision to launch the IPO of Ujjivan Small Finance Bank. Analysts feel the listing of the bank is negative for shareholders.

Shares of Sun Pharmaceutical Industries climbed 2.66 percent to Rs 425.80 after the US health regulator classified the company’s Halol plant as ‘No Action Indicated’.

Shares of Repco Home Finance gained 6.36 percent to settle at Rs 330.30 after global brokerage BNP Paribas retained its buy call on the stock on turnaround potential. The research firm has a target price for the stock at Rs 556, implying 79 percent potential upside from current levels.

Shares of Coffee Day Enterprises gained 4.92 percent to end the day at Rs 66.05 after a media report said that the promoters were likely to resume talks with Coca-Cola for a stake sale in Cafe Coffee Day chain to cut the debt.

Shares of Dewan Housing Finance Corporation (DHFL) jumped 6.86 percent to Rs 49.05 after media reports suggested that the lenders to the company agreed to work on a resolution plan that includes converting part loans to equity.

Global update:

European stock markets rose for the second session running on August 19, with Frankfurt shares leading recovery from last week’s six-month lows as investors cheered signs of moves by Germany and China to counter slowing growth, said Reuters.

Asian markets ended higher tracking the Wall Street rally. Shanghai Composite rose 2.1 percent at 2,883.10, Nikkei added 0.71 percent at 20,563.16 and Kospi jumped 0.66 percent to 1,939.90.

Technical view:

Nifty after opening higher at 11,094.80 extended gains and hit an intraday high of 11,146.90, but the selling in last hour of trade dragged it to day’s low of 11,037.85. The index closed 6.10 points higher at 11,053.90.

“Nifty registered Shooting Star kind of formation with long upper shadow as it witnessed selling pressure from intraday highs of 11,146 as it tested its 21-day exponential moving average (11,148) which appears to be capping the pullback attempts of the index,” Mazhar Mohammad, Chief Strategist – Technical Research & Trading Advisory, told .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.