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Sensex, Nifty close flat as RIL ends in red post 43rd AGM

Sectorally, losses in banks, media and realty were capped by 5% jump in IT sector and marginal gains in metal, FMCG, pharma and auto

twitter-logoBusinessToday.In | July 15, 2020 | Updated 18:17 IST
Sensex, Nifty close flat as RIL ends in red post 43rd AGM
Worldwide, the number of cases linked to COVID-19 disease has crossed 1.32 crore. In India, the number of infections spiked to 9.36 lakh

Sensex and Nifty erased early gains and closed flat on Wednesday in contrast to positive global equities. Market indices gave up almost 2% gains by the last hour of the session as RIL AGM started. After a volatile trading session, Sensex ended 18 points higher at 36,051 and Nifty rose 10 points to 10,618. Yesterday, Sensex ended 660 points lower at 36,033 and Nifty fell 195 points to 10,607.

Earlier, markets opened higher and gained momentum by the first hour of the session on back of strong global and domestic cues. Investor sentiment strengthened after the human clinical trials for COVID-19 vaccine were initiated in India. News about experimental vaccine developed by Moderna and the NIH in the US also helped global markets gain momentum.

Although, after RIL's AGM, benchmarks gave up all gains and ended flat. On markets sudden drop at the closing session, S Ranganathan, Head of Research at LKP Securities said," Markets gyrated to Reliance today as its first Virtual AGM was a widely watched event with plenty of action across its verticals. While Technology stocks led the charge in the first half, profit booking seen in Reliance during the second half created market volatility".

Ajit Mishra, VP - Research, Religare Broking said,"Significant selling pressure witnessed in the latter half due to weakness in banking stocks and a sharp decline in the index heavyweight Reliance Industries."

Infosys, Axis Bank, Tech Mahindra, Bajaj Finance, Tata Steel, HCL Tech and IndusInd Bank were among the other gainers on Sensex. On the other hand, Bharti Airtel, ITC and Kotak Bank were the laggards.

Sectorally, losses in banks, media and realty were capped by 5% jump in IT sector and marginal gains in metal, FMCG, pharma and auto.

Reliance shares also ended 3.71% lower at Rs 1,845 today. Besides RIL, Bharti Airtel, Vodafone Idea & Future Group stocks also slipped after Reliance announced Google's investment in Jio Platforms and home-grown 5G solution.

On RIL's AGM outcomes, Nirali Shah, Senior Research Analyst, Samco Securities said," On the Oil to Petrochem business, its deal with Saudi-Aramco having been postponed due to unforeseen conditions comes in as a negative. However, overall the capital raise from selling over 33% stake in Jio Platforms, rights issue of Rs 53,124 crore and stake sale worth Rs 7,500 crore to British energy giant BP in the petro-retail joint venture has helped Reliance achieve its net debt-free status earlier than its target, making its balancesheet very robust.

Expressing views on the RIL stock, he added,"The stock price of Reliance has witnessed a decline towards the end of the AGM since most of the news was already priced in and there were not many surprises. Hence, it will see some correction to levels of 1750 in the short term but the long-term growth trend is still intact for this stock. "

Meanwhile, Infosys, the country's second-largest software exporter and private lenders Bandhan Bank, Federal Bank along with 50 other listed companies are scheduled to announce their earnings report on Wednesday.

Overseas, Asian shares ended mostly higher on Wednesday, tracking gains from positive Wall Street as investors banked on news that an experimental COVID-19 vaccine under development by Moderna and the US National Institutes of Health revved up people's immune systems. European markets also traded higher on the global equity upmove, ignoring the continued rise of coronavirus cases all over the world.

Worldwide, the number of cases linked to COVID-19 disease has crossed 1.32 crore. In India, the number of infections spiked to 9.36 lakh.

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