Stock Market Today: Sensex, Nifty Resume Advance After One-Day Fall As L&T, RIL Lead; FPIs Stay Net Sellers

Overseas investors remained net sellers of Indian equities for the eleventh day in a row on Wednesday

Foreign portfolio investors offloaded stocks worth Rs 84.6 crore, according to provisional data from the National Stock Exchange.

Domestic institutional investors remained net buyers and mopped up equities worth Rs 524.5 crore, the NSE data showed.

Foreign institutions have been net buyers of Rs 92,521 crore worth of Indian equities so far in 2023, according to data from the National Securities Depository Ltd., updated till the previous trading day.

The yield on the 10-year bond closed flat at 7.27% on Wednesday.

Source: Bloomberg

• The local currency closed flat at 83.28 against the U.S dollar on Wednesday.

Source: Bloomberg

India's benchmark stock indices resumed advance after one-day fall as it ended marginally higher on Wednesday. Pharma, realty and energy sectors advanced, whereas I.T. and non-banking financial companies were under pressure.

Currently, there are three significant trends in equity markets, as per Dr. V K Vijayakumar, chief investment strategist at Geojit Financial Services.

"One, global markets are stable as indicated by the seven-day winning streak in Dow and S&P 500. Two, a risk on is evident in markets primarily driven by the sharp correction in the U.S. 10-year bond yield. Three, the crash in Brent crude from around $94 to below $82 now indicates that the market doesn’t expect the Israel-Gaza conflict to aggravate into a wider regional conflict."

In brief, the market construct is favourable for the continuation of the rally despite the geopolitical uncertainties, he said.

Intraday, Sensex jumped over 65,100 level to end over 100 points below day's high and Nifty 50 scaled over 19,460 mark, both rising over highest level in over two weeks since Oct. 23.

The S&P BSE Sensex closed up 33 points, or 0.05%, at 64,975.61 while the NSE Nifty 50 was 37 points or 0.19% higher at 19,443.59.

The price action is witnessing contraction ahead of the 78.6% retracement level acting of its prior swing high and low as overhead resistance near the 19,437 level, Avdhut Bagkar Technical and Derivatives Analyst, StoxBox said. "The index is anticipated to attract further bullish strength on reclaiming the retracement level in the pullback rally."

Stocks edged lower as investors awaited clues on the path of interest rates from a raft of central bank officials including Federal Reserve Chair Jerome Powell. Europe’s Stoxx 600 fell 0.2% and U.S. equity futures traded little changed.

Australian and Taiwanese markets were marginally higher, whereas Japanese, Hong Kong, Chinese and South Korean markets fell. Japanese banks extended their drop on falling yields that tempered expectation of higher profitability.

ICICI Bank Ltd., Infosys Ltd., NTPC Ltd., Bajaj Finance Ltd., and Kotak Mahindra Bank Ltd. were negatively adding to the change in the Nifty 50 Index.

Whereas, Larsen & Toubro Ltd., Reliance Industries Ltd., ITC Ltd., HDFC Bank Ltd., and Asian Paints Ltd. were positively contributing to the change.

The broader markets outperformed larger peers; the S&P BSE MidCap Index was up 0.82%, whereas S&P BSE SmallCap Index was 0.61% higher.

The tug of war between the FIIs and DIIs continues with sustained selling by the FIIs and sustained buying by the DIIs. Since the buy on dips strategy is working, retail investors are buying in the broader market on every dip, Dr. V K Vijayakumar, chief investment strategist at Geojit Financial Services, said.

"There is no selling pressure in the broader market since FII selling is confined to large caps. The best opportunity for long-term investors is in high quality large caps since these stocks will do well when FIIs eventually turn buyers," he added.

Fifteen out of the 20 sectors compiled by BSE advanced while five declined. S&P BSE Realty and S&P BSE Services rose the most.

The market breadth was skewed in the favour of the buyers. About 2,020 stocks rose, 1,678 declined, while 141 remained unchanged on the BSE.

For investors with long positions, it is advisable to continue trailing their stop loss to protect their gains, Mandar Bhojane, Research Analyst at Choice Broking said. "As for traders, it is recommended to consider buying the dips, but exercise caution by setting a strict stop loss near the 19,200 levels to manage risks effectively."

• Revenue at Rs 276.3 crore vs Rs 253.9 crore, up 9% YoY

• Ebitda at Rs 65.7 crore vs Rs 45.7 crore, up 43.7% YoY

• Margin at 23.8% vs 18% YoY

• Reported profit at Rs 49.7 crore vs Rs 35.5 crore, up 40% YoY