Sensex, Nifty end flat amid volatility; IT, metal stocks rally

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After hitting record highs, Indian benchmark equity indices ended flat on Wednesday amid profit booking. Sensex failed to hold 56k-mark and settled 14.77 or 0.03% lower at 55,944.21, while Nifty closed at 16,634.65, up 10.05 points or 0.06%.

“The rapid ascent from last week’s lows was bereft of enough bullish continuation patterns, rendering it vulnerable for correction. Hence, despite the prospects of covering of shorts that have been accumulated in the last fortnight, the approach to the recent peak of 16701 gave the bears a vantage point to launch a counterattack. This dip can stretch further in the early part of Thursday, as the financials have been found quite reluctant to support. However, mid and small caps look to have found their voice, suggesting that overall sentiments may not turn outright negative and bulls could attempt a regroup once inside the 16585-520 region, for a dash towards 17000-200. Alternatively, direct fall below 16520 could call for 16200-15700, which though, is less expected for now,” said Anand James, Chief Market Strategist at Geojit Financial Services.

Gainers & losers

Sectoral strand

Sectoral indices on the NSE ended mixed with Nifty Metal, Nifty IT and Nifty FMCG indices closing in the green On the other hand, Nifty Pharma, Nifty Pharma Nifty Auto and Nifty Bank settled in the red.

Broader market

Some strength was visible in the broader markets as the BSE MidCap index ended with gains of 0.58% or 131 points to 22,947. Even the BSE SmallCap index settled higher at 25,961 higher by 174 points or 0.68%.

Bulls had an upper hand in today’s session as 1,988 shares advanced compared to 1,216 declined and 106 remained unchanged.

Global markets

European shares rose across the board while most Asian stocks traded higher as optimism continued to drive U.S. stocks, with the S&P 500 and Nasdaq reaching record highs overnight.

Global sentiment improved as US House passed a measure approving $3.5 trillion budget blueprint and USFDA granted full approval to COVID-19 vaccine developed by Pfizer. Investors continued to remain concerned that spread of highly infectious delta variant may derail the global economic recovery. Additionally, markets will remain vigilant ahead of the Jackson Hole Symposium.

US central bankers will meet virtually for an annual gathering traditionally held in Jackson Hole in Wyoming. Jerome H. Powell, the Fed’s chair, will speak on Friday and is expected to reveal details about how and when the bank plans to begin winding down its bond-buying program. The Fed has started discussions to pull back its $120 billion a month bond-buying program by the end of this year.