A clear trend in the market during the last several trading sessions is the outperformance of largecaps led by high-quality private sector financials. The underperformance of the mid- and smallcaps segment is a desirable and healthy trend since it is removing the froth in the segment, said an analyst.
“An area of concern in the market now is the frenzy in the IPO market where retail investors are applying for IPOs and OFSs without any consideration of fundamentals and future prospects. The goal is just to make money on the listing. Many retail investors are likely to lose money in the future from some of these issues,” said VK Vijayakumar, Chief Investment Strategist at Geojit Financial Services.
How are the bluechips doing?
After opening in the green, benchmark indices climbed further. At 9.32 am, BSE flagship Sensex was up 207 points or 0.40 per cent to 54,610. NSE benchmark Nifty advanced 52 points or 0.32 per cent to 16,310.
“Nifty closed higher after testing our turnaround point of 16,174, which is encouraging, but not an outright signal towards directional upsides. We would pin our hopes on the 16,246/33 region to hold early dips and attempt a push towards 16,320 or 16,400. However, even such an up move would still be within our broadening wedge expectation. In other words, volatility would continue to dominate,” said Anand James, Chief Market Strategist at Geojit Financial Services.
In the 50-share pack Nifty, HDFC was the biggest gainer, up 1.57 per cent. Kotak Mahindra Bank, Axis Bank, HDFC Life Insurance, Reliance Industries and IndusInd Bank were among other gainers.
was the top loser in the pack, down 3.50 per cent. Power Grid, Hero MotoCorp, Grasim, India, Bajaj Auto, Wipro, Britannia, Indian Oil and ITC were other losers in the pack.
FACTORS DRIVING MARKETS
Good news
US job data: Job openings, a measure of labour demand, shot up by 590,000 to a record high of 10.1 million on the last day of June, the US Labour Department reported. This signifies improving economic conditions.
Bad news:
Bond yields, dollar rise: The dollar index firmed near more than two-week high. US Treasury yields rose to a more than three week high as record-high job openings on top of stronger-than-expected employment gains in July added to the narrative of an improving labour market.
Rate hikes?: Two Federal Reserve officials said on Monday that the US economy is growing rapidly and that while the labour market still has room for improvement, inflation is already at a level that could satisfy one leg of a key test for the beginning of interest rate hikes.
Virus scare: Persistent concerns over the spread of the Delta variant of the coronavirus dented sentiment and triggered falls in metals and oil prices.
Broader markets
Broader market indices were trading mixed, underperforming their headline peers in morning trade. Nifty Smallcap was down 0.04 per cent, while Nifty Midcap rose 0.45 per cent. Broadest index on NSE, Nifty 500 was up 0.32 per cent.
Birlasoft, IOL Chemicals and Pharma, Future retail, Hindustan Aeronautics, GSPL and Escorts were gainers from the space, while Vodafone Idea, Prestige Estates, IDFC First Bank, Happiest Minds, Caplin Point and BASF were under selling pressure.
Global markets
MSCI’s broadest index of Asia-Pacific shares outside Japan declined 0.4 per cent, with Korea’s KOSPI index down 0.56 per cent, while China’s blue chip index CSI300 shed 0.33 per cent.
Japan’s Nikkei was UP 0.9 per cent while Australia’s benchmark S&P/ASX200 was 0.2 per cent higher on the back of strong earnings results.
