What Happened with Market Today

Equity benchmarks closed marginally lower after fluctuating between gains and losses in a volatile session as losses in banking and FMCG stocks offset the gains in information technology, realty, metal, media, and auto stocks. Focus now shifts to the U.S. Federal Reserve meeting outcome due later today, as investors look for a potential timeline for tapering stimulus. The broader indices outperformed their larger peers as the action shifted to mid-cap and small-cap stocks.

Nifty 500 stocks advance-decline ratio is favorable at 2.3:1. Sensex slipped 78 points or 0.13 percent to close at 58,927 while Nifty declined 15 points or 0.1 percent to 17,547. Bank Nifty fell over a half percent on account of profit booking in private banks. HDFC was the top loser in the Nifty pack, shedding over 1 percent, followed by Nestle India, ICICI Bank, Kotak Bank, and HDFC Bank. On the other hand, Tech Mahindra, M&M, HCL Tech, and Bajaj Auto were among the gainers.

The broader indices outperformed their larger peers with the Nifty MidCap and Small-Cap adding 1.5% each. Nifty media Index witnessed the biggest gainer today and surged 15% to close to a 2-year high at 2205 led by media major Zee Entertainment following its merger deal with Sony Pictures, which have boosted sentiment. Nifty Realty index, adding over 8% to close 10-year high at 454. Nifty IT and auto Index surged 1% each, Nifty Metal Index gained 1.5% while FMCG Index slipped 0.3%.

Undertone sentiment is positive in the market on account of strong FIIs and local fund buying interest and favorable government policy. Among the global market, China Index slipped while China Property Index surged by 5% after the China Evergrande Group’s main unit said it would make a coupon payment on its domestic bonds on Thursday, offering some relief to jittery markets. European equities (gained 1%) continued their recovery from a two-month low as investor concerns over contagion from blowup at China Evergrande Group ease ahead of the Federal Reserve’s policy update.

Zee shares jumped 32% to close at Rs337 (volume 19cr share on NSE) following the deal announcement, giving it a market value of $4.4 billion. About 53% of the merged entity would be owned by Sony India shareholders and the rest by Zee’s holders, the companies said. Sony shareholders will inject capital into its unit so that it will have about $1.58 billion of funds at closing, and Sony would nominate a majority of the board.

Nifty Realty index surges as much as 8% to its highest level since Nov. 2010, led by Godrej Properties after the developer reported sales of Rs575cr in a single day at its residential project in Noida, near New Delhi. Godrej Properties climbed as much as 13% to a record high at Rs1351 amid 60 lakh shares traded on NSE. To encourage the lower middle class and the poor to buy a flat, the government in Karnataka has said that the stamp fee will be reduced to 3% from 5%. Sobha gained 6% to close to a record high of Rs751. DLF climbed up 12% to close at Rs369 amid 4.2cr shares traded on NSE. Bull Real, Phoenix Mills, and Oberoi Realty surged between 4-8%.

Entertainment stocks gained after the Media report said the western state of Maharashtra may soon allow them to resume operations. PVR gained 4% to close at Rs1568 while touched an intraday high of Rs1632. Inox Leisure surged over 11% to close at Rs360.

Tech stocks gained in the hope of good quarterly results and a strong order book. KPIT Technologies gained 6% to close at Rs339 after the board approved the acquisition of an initial 25% shareholding in Future Mobility Solutions GmbH and said it will buy the remaining stake over three years. MindTree surged 4% to close at a record high of Rs4523. The company said that it made several key executive appointments to accelerate growth in the two markets. Tech Mahindra advanced 4% to close at Rs1513. LTI, Mphasis, and HCL Tech gained 1-2%.

Metal stocks like Hindalco gained 3% to close at Rs463. NMDC advanced 5% to close at Rs145. Tata Steel, SAIL, Nalco, and Jindal Steel gained 1-3%. FMCG stocks like Hindustan Unilever, Britannia, Godrej Consumers, Colgate, and Nestle declined 1-2%. However, United Spirits gained 4% to close at Rs774.

Technical Outlook:

The Nifty index opened positive and surpassed its previous day’s high but comparatively moved in a narrow range. It remained consolidative for the most part of the day and saw slight weakness in the concluding hour. It formed a small-bodied Bearish candle on a daily scale and closed flattish but was hovering near to the highs of the previous session. Now it has to continue to hold above 17500 zones, for an up move towards 17650 and 17777 zones whereas support is placed at 17350 and 17272 zones.

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