Domestic equity indices opened with cuts on Wednesday amid the volatility tracking the expiry of F&O contracts for January series. All major sectors posted losses after flat session. Indian equity markets will observe a holiday on Thursday on the account of Republic day.
US stocks settled mixed during the overnight trade but traders are awaiting US Fed's policy meet next week and key economic data, due later this week. On a domestic front, Union Budget, sheduled on February 1, will be a key trigger for the equity market.
As of 9.20 am, BSE Sensex was trading at 60,799.34, falling 180 points or 0.29 per cent. Nifty50 dropped 71 points or 0.39 per cent to 18,047.40 on Wednesday. BSE midcap and smallcap indices were also in red, declining about half a per cent. Fear gauge India VIX jumped 2 per cent to 13.90-level.
The index has been sustaining above the 20 day’s EMA over the past couple of session, which had been acting as a stiff resistance over the past five weeks, indicating a revival of upward momentum amid elevated volatility ahead of Union Budget coupled with ongoing earning season, said ICICIDirect Research.
On a sectoral front, real estate pack topped the losers, followed by Nifty PSU lenders. Metal, IT, financial services and FMCG indices were also trading half a per cent down each. On the contrary, Nifty auto index and media stocks were able to post mild gains.
Among the bluechip counters, Adani Group's Adani Ports plunged 3 per cent, followed by a 2 per cent fall in Adani Enterprises, whose Rs 20,000 crore follow-on public offering will open on Friday, January 27. Its anchor book will open Today.
State Bank of India, HDFC Bank, SBI Life Insurance Company, Dr Reddy's Labs, HDFC, Tata Consumer Products, Axis Bank and Apollo Hospitals were the other key laggards, which dropped a per cent each.
Maruti Suzuki and Tata Motors topped the gainers among Nifty50 stocks on the back of Q3 result optimism. The latter one will announce its earnings today, whereas the former one reported a 130 per cent rise in the net profit. Tata Steel, ICICI Bank and Here Motocorp were also trading higher.
Two major events of February 1st - the Union Budget and the Fed decision on interest rate - have the potential to break the narrow range of Nifty. A good budget and positive commentary from the Fed can break the upper band, said VK Vijayakumar, Chief Investment Strategist at Geojit Financial Services.
"On the contrary, any negative budget proposal like raising the rate of long-term capital gains tax or a worse-than- expected hawkish Fed can break the lower end of the range. Let’s wait for the actual outcome," he added.
In the broader markets, Bliss GVS Pharma jumped 12 per cent, followed by a 8 per cent rise in Sharda Cropchem after strong Q3 performance. Nazara Tech, Likhita Infra, CarTrade Tech, Gland Pharma and Elecon Engineering rose 5 per cent each.
On the downside, Quickheal, Tatva Chintan Pharma, Manaksia, Indus Towers, KBC Global, Sasken Technologies were down 5-6 per cent each.
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