Benchmark indices Sensex and Nifty gave up early gains and closed on a bearish note on Monday, tracking mixed cues from European and Asian markets. Amid heavy selling pressure in index majors like HDFC twins, Reliance Industries and Bharti Airtel, Sensex fell 97 points to close at 39,756 and Nifty ended 43 points lower at 11,421. Markets were mixed overseas as traders awaited cues from the US central bank expected later in the week.
HUL, Asian Paints, Maruti, Bajaj Auto and Nestle India were among the laggards. On the other hand, HCL Tech, followed by Tech Mahindra, HDFC twins, Reliance Industries, TCS, SBI and IndusInd Bank were among the top gainers today. Sectorally, gains in IT, media, realty and auto were capped by losses in banking and financials and FMCG.
Vinod Nair, Head of Research at Geojit Financial Services said,"Indian benchmark indices gave up gains and closed with a negative bias. However, the broader markets outperformed, especially the smallcap index, after SEBI tweaked MF norms for multi-cap funds."
S Ranganathan, Head of Research at LKP Securities said,"The broader markets stole the show today amidst volatile trade due to covid cases and margin penalty worries. IT and Pharma led the rally as several Small & Midcap stocks registered smart gains today despite the clarifications put out on multi-cap schemes of mutual funds. The street seems to have taken the measures to broadbase the market positively as was evident in increased appetite for several stocks across sectors".
Commenting on on guidelines by SEBI's announcement on multi-cap funds, Jyoti Roy - DVP- Equity Strategist, Angel Broking said,"The SEBI circular has brought the small cap space in the limelight and we expect greater interest in the space post the proposed SEBI guidelines. In the small cap space we would recommend investors to stick to high quality companies with strong business franchises. In the small cap space we are positive on Chalet Hotels, Hawkins Cooler, Inox Leisure, JK Lakshmi Cement, Metropolis Healthcare, Persistent Systems, Radico Khaitan and VIP Industries, Swaraj Engines and Zensar Technologies which are part of our recommendations."
Midcap and smallcap stock were bullish today after SEBI's announcement of new rules that multi-cap mutual funds will be required to increase their exposure to mid and small caps stocks to 25% of their AUM by January 2021.
On the currency front, Indian rupee pared early gains and settled 5 paise higher at 73.48 per dollar, tracking muted trend from domestic equities.
Asian markets were rose today following news of a potential COVID-19 vaccine as AstraZeneca resumed its phase-3 trial. Although gains were capped as traders also awaited the outcome from the US central bank's two-day policy meeting, scheduled on September 15-16.
Equities in the US closed mixed as week as investors focussed on technology stocks that showed signs of profit booking. In the US, the Nasdaq Composite Index fell 66.05 points, or 0.6%, on continuing sell-off in tech stocks. The Dow Jones Industrial Average rose 131.06 points, or 0.5%; while the S&P 500 rose 1.78 points, or 0.1%.
Yash Gupta - Equity Research Associate, Angel Broking said," Global markets were trading higher - DOW Jones up by 116.38 points (up 0.42%) and NASDAQ up by 80 points (up 0.73%)."
Expressing views on market closing today, Manish Hathiramani, proprietary index trader and technical analyst, Deen Dayal Investments said," We were unable to sustain above the 11550-11575 levels which is a little concerning. Even if it were to take a day or two and then get past those levels, we are in bullish territory. That would take us back to 11800 and thereafter towards 12000. The support for the Nifty is at 11300."
On Nifty's technicals, Sameet Chavan (Chief Analyst-Technical and Derivatives, Angel Broking said,"As far as levels are concerned, 11550-11650 are likely to act as immediate hurdles; whereas on the lower side, 11350-11200 would be seen as a key support zone."
Speaking on the upcoming market outlook, Ajit Mishra, VP - Research, Religare Broking said, "Among the major triggers, participants will first react to the IIP numbers next week, followed by the CPI and WPI inflation data in the coming sessions. Besides, further updates on disengagement between India and China at LAC would also remain on their radar.
Meanwhile, Q1 result announcement scheduled for today by Apollo Hospital, Bajaj Healthcare, Balaji Telefilms, centrum capital, Future retail, ITI ltd, NBCC (India) ltd, PC jewelers, PVR LTD, SAIL will also help set the tone for market tomorrow.
Worldwide, there were 291.85 lakh confirmed cases and 9.28 lakh deaths from COVID-19 outbreak. Meanwhile, India's death toll from COVID-19 infections rose to 79,754 and total coronavirus cases to 48.46 lakh as of Monday.