Stock Market Update: Sensex, Nifty Slip on Profit Booking; IT Stocks Stand Strong

Rajesh
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In the latest trading session, the Indian stock market witnessed a modest decline as profit booking took place in select heavyweight stocks, including Reliance Industries, Power Grid, SBI, and ICICI Bank. This led to both the frontline indices, the Sensex and the Nifty, closing in the red. Mixed global cues further added to the cautious sentiment among investors.

Stock Market Update: Sensex, Nifty Slip on Profit Booking; IT Stocks Stand Strong

The lack of fresh triggers and the current premium valuation of the domestic market contributed to profit booking. Additionally, the June quarter numbers failed to exceed expectations, causing concerns about the stretched valuations and the likelihood of a market correction. 

Amidst mixed global cues, the market witnesses profit booking, but IT stocks remain resilient. Stay informed with the latest updates

V K Vijayakumar, Chief Investment Strategist at Geojit Financial Services, pointed out that the ongoing rally is pushing valuations to uncomfortable levels. The Sensex is now trading at 25 times trailing one-year earnings, mainly driven by PE (Price-to-Earnings) expansion rather than commensurate earnings growth. The muted Q1FY24 earnings growth, except in banking and refineries, suggests that rural demand is yet to pick up significantly.

Despite the Indian economy being in a favorable position, Vijayakumar advised caution in fresh investments, especially in low-grade small-cap stocks.

Stock Market Performance Today

The Sensex started the day with a slight increase at 66,532.98, but it remained volatile throughout the session, swinging 270 points. Ultimately, the index closed 68 points (0.10%) lower at 66,459.31. The Nifty, on the other hand, ended the day with a loss of 20 points (0.10%) at 19,733.55.

The BSE Midcap index underperformed the benchmark Sensex, falling 0.23%. It touched a record high of 30,497 during intraday trade but failed to sustain the gains. Meanwhile, the BSE Smallcap index managed to end with a gain of 0.50% at 35,177.85, reaching a record high of 35,257.68 during the session.

Sensex Top Gainers and Losers

Among the 30 stocks in the Sensex, 15 recorded gains while the other 15 suffered losses. Power Grid, Bajaj Finserv, IndusInd Bank, Reliance Industries, SBI, and Maruti were among the top losers. On the other hand, NTPC, Tech Mahindra, HCL Tech, Mahindra and Mahindra, TCS, and Infosys ended as the top gainers in the index.

Notable Stocks Hitting 52-Week Highs

Despite the lackluster market performance, numerous stocks hit their fresh 52-week highs during intraday trade on BSE. Companies such as Hero MotoCorp, Bharat Forge, Dr. Reddy's Labs, JSW Steel, Lupin, NTPC, and Shriram Finance were among those achieving this feat.

Crude Oil Prices and Nifty Gainers and Losers Today

Crude oil prices experienced a slight retreat, but the US's signs of tightening global supply and demand scenario limited the losses. Brent Crude traded 0.60% lower at $84.92 per barrel around 4 pm.

Among Nifty stocks, Coal India, NTPC, and Tech Mahindra ended as the top gainers, while Power Grid, Hero MotoCorp, and Apollo Hospitals were the top losers.

Sectoral Indices Performance

Most sectoral indices witnessed losses, except for Nifty IT, which managed to gain 1.20%. All components in the Nifty IT index closed in the green. Nifty Metal, Pharma, and Private Bank also inched up, albeit by smaller margins.

Nifty Realty suffered the most significant loss among sectoral indices, falling 1.77%. Nifty PSU Bank, Healthcare, and Oil & Gas indices also ended lower, declining by 0.52%, 0.42%, and 0.38%, respectively. Nifty Bank saw a slight decline of 0.13%.

Experts' Views on the Market

Shrikant Chouhan, Head of Research (Retail) at Kotak Securities, highlighted caution among investors as the market showed a rangebound trend and closed marginally lower ahead of the RBI's monetary policy announcement. Chouhan suggested that markets would keep an eye on global cues due to the recent fast-paced rally and expensive valuations. Profit-taking is expected to continue despite the overall bullish undertone.

Vinod Nair, Head of Research at Geojit Financial Services, noted that IT stocks rallied due to optimism surrounding a soft landing for the US economy. He also emphasized the importance of key data points such as auto sales figures, US PMI, and US job data in influencing the market direction in the upcoming days.

Technical Views on Nifty

Jatin Gedia, Technical Research Analyst at Sharekhan by BNP Paribas, pointed out that the Nifty witnessed a bounce back from the 19,600 level where the 20-day moving average is positioned. However, he also highlighted the absence of support from the momentum indicator, suggesting that the bounce may not be the start of a new up-move. The daily and hourly momentum indicators provide divergent signals, indicating the absence of trending moves.

Gedia maintained that the Nifty is likely to remain range-bound between 19,500 and 20,000. Crucial support levels to watch are 19,630 - 19,600, while the immediate hurdle zone on the upside is at 19,800 - 19,860.

Note: 

The views and recommendations provided above are those of individual analysts and broking companies and not of tradingtalk.in. Investors are advised to consult certified experts before making any investment decisions.

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