Sensex, Nifty choppy in early trade; financials, auto stocks drag

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Indian benchmark equity indices opened lower amid volatility on Monday, tracking a negative trend in Asian peers. At 9:52am, Sensex was at 52,972.29, down 3.51 points or 0.01%, while Nifty was little changed at 15,855.65.

“15600 – 15900 range has held well for the Nifty for some time now. Buying at around 15600 and selling at around 15900 have proved to be profitable for traders. This range is likely to break on the upside when FII selling becomes weak and DII buying becomes strong, as is happening now. The very good Q1 results declared so far confirm the turnaround in corporate earnings. And this can embolden the bulls. If the Nifty breaks 15900 decisively & move forward, that rally is likely to be led by a new set of heavyweights,” said V K Vijayakumar, Chief Investment Strategist at Geojit Financial Services.

An important development in the banking space is the huge outperformance of ICICI Bank over HDFC Bank. This month, so far, HDFC Bank is down 3.7% while ICICI Bank is up by 7.3%. Globally, while the US & European markets are at record highs, Asia is under pressure due to rising Covid cases in Indonesia, Korea & Japan. This is unlikely to weigh on India since fresh cases are continuously on the decline in India except in certain pockets, added Vijayakumar.

Earnings today

Axis Bank, Kotak Mahindra Bank, Larsen & Toubro, Tata Motors, SBI Life Insurance Company, Vedanta, Alembic Pharmaceuticals, Apollo Pipes, Coromandel International, DLF, GlaxoSmithKline Pharmaceuticals, Garden Reach Shipbuilders & Engineers, Jindal Stainless, KPIT Technologies, M&M Financial Services, Navin Fluorine International, Phillips Carbon Black, Ramkrishna Forgings, Sun Pharma Advanced Research Company, Vakrangee, and Zensar Technologies are set to release their quarterly earnings today.

Gainers & losers

Sectoral strand

Sectoral indices opened mixed as the Nifty Metal advanced 0.91%, Nifty FMCG rose 0.22% while Nifty Auto, Nifty Pharma and Nifty Realty were marginally up around 0.03%.  Whereas Nifty Bank lost 0.25%.

Broader market

Broader markets opened mixed. BSE MidCap index opened with a negative bias of 0.28% to 22,956. On the other hand, the BSE SmallCap index was quoting at 26,452 up 0.10%.

Market breadth was positive as 1,503 shares advanced on the BSE, while 975 declined and 104 remained unchanged.

Global markets

Overseas, Asian stocks are trading mixed on Monday, as Chinese tech stocks in Hong Kong plunged. China’s antitrust regulator ordered Tencent to give up its exclusive music licensing rights and slapped a fine on it for anti-competitive behaviour, marking yet another development in Beijing’s ongoing crackdown on its domestic internet titans.

Investors likely continued to monitor the Covid situation in Asia as it weighs on sentiment. In South Korea, the second-highest level of virus restrictions will be reportedly applied to non-capital areas starting Tuesday. Indonesia on Sunday also reportedly extended its Covid restrictions by a week.

U.S. equities rose Friday with the major averages hitting new records as they overcame concerns about economic growth from earlier in the week. The Dow closed above 35,000 for the first time ever. The blue-chip average rose 238.20 points, or 0.68%, to 35,061.55. The S&P 500 gained 1.01% to 4,411.79 and the Nasdaq Composite climbed 1.04% to 14,836.99, both new closing highs for the benchmarks.