Sensex, Nifty Log Gains Aided By Reliance & I.T. Stocks

India's stock benchmarks closed higher, aided by gains in information technology stocks, as investors assess the possible impact due to the omicron coronavirus strain.

The S&P BSE Sensex gained 0.27% to 57,260.58. The 30-stock gauge rose nearly 1% in intraday trade before erasing the gains. The NSE Nifty 50 also advanced by similar magnitude to 17,053.95. Reliance Industries Ltd. contributed the most to the index gain, increasing 1.2%. Kotak Mahindra Bank Ltd. had the largest increase, rising 2.8%. Today, 18 of 50 shares rose, while 32 fell.

The broader indices underperformed their larger peers, with S&P BSE MidCap shedding 1% and S&P BSE SmallCap slipping 2%. Thirteen of the 19 sectoral indices compiled by the BSE Ltd. declined with S&P BSE Utilities falling over 2.5%. On the flipside, the S&P BSE Information Technology and S&P BSE Teck indexes rose over 0.6%.

The market breadth was skewed in the favour of bears. About 967 stocks advanced, 2,433 declined and 175 remained unchanged.

"Investors are trading with caution, especially after reports of a rising threat of a new South African coronavirus variant. After an early morning intraday selloff, Nifty found support near 16,780 and reversed sharply, but once again it failed to close above the 100 day SMA", Shrikant Chouhan, Head of Equity Research (Retail), Kotak Securities Ltd. wrote in a note and added "On daily and intraday charts, the index has maintained a lower top series formation which is broadly negative. However, on the intraday chart, the index is consistently taking support in the range of 16,950-16,970 levels."

• Shares of Ipca Laboratories Ltd. rose over 6% in intraday trade, the biggest single day gain in nearly two months to Rs 2,139.95 apiece.

• Trading volume was 2.8 times the 30-day average volume, for this time of the day.

• Ipca Lab trades at 26 times its estimated earnings per share for the coming year.

• Analysts have 18 'buy', six 'hold' and no 'sell' recommendations on the stock.

The pace at which India’s shadow financiers are extending loans is set to accelerate to 8% to 10% in the financial year starting April 1, as compared to 6% to 8% in the current financial year, Crisil Ratings said in a note.

• Crisil expects the fastest loan growth in four years due to improving economic activity and stronger balance sheet buffers of lenders.

Source: Bloomberg