Equity benchmarks the Sensex and the Nifty ended with slim gains on March 11 as concerns over geopolitical issues, inflation and increasing cost pressures on corporates weighed on investor sentiment.
Sensex swung between gains and losses through the day as optimism over in-line assembly election outcome faded away and global cues came back to focus.
Rupee closed 29 paise, or 0.38 percent, lower at 76.59 against the dollar. Crude oil benchmark Brent Crude rose about 3 percent in international markets.
Investors are now fixing their eyes on the Fed meeting for the trajectory of rate hikes as the US yearly inflation rose to 7.9 percent in February, its highest level since January 1982.
Sensex ended 86 points, or 0.15 percent, higher at 55,550.30 while the Nifty50 closed the day at 16,630.45, up 36 points, or 0.21 percent. Both key indices extended their gains into the fourth consecutive session.
MIdcaps and smallcaps outperformed the benchmark as the BSE Midcap and smallcap indices closed 0.45 percent and 0.90 percent higher, respectively.
"Indices remained range-bound today on worries over increasing cost pressures on corporates, rising inflation globally and slowing automobile despatches to dealers amidst supply constraints," said S Ranganathan, Head of Research at LKP securities.
Among the sectors, BSE Healthcare jumped 2.07 percent. Sugar and paper stocks also witnessed decent traction.
"Pharma stocks bucked the trend and the breadth in the broader markets was encouraging. Sugar stocks gained post-election results and ethanol push while paper stocks were in demand post price hikes that are seen to offset input cost pressures," said Ranganathan.
For the week Nifty rose 2.4 percent and the Sensex clocked a gain of 2.2 percent. The overall market-capitalisation of BSE-listed firms rose to ₹252.8 lakh crore from ₹246.8 lakh crore on March 4, making investors richer by ₹6 lakh crore in a week.
"After the strong recovery during the week, the domestic market trend turned cautious on Friday, as focus shifted to next week’s upcoming issues like inflation, BoE & US Fed policy," said Vinod Nair, Head of Research at Geojit Financial Service.
Nair pointed out that inflation levels in India and abroad may rise even higher in March, though on a temporary basis, considering the impact of the Russia-Ukraine issue. However, if developments go well like diplomatic progress on war, revert of commodity price and in-line rate hike decision, stock market trend should be stable and healthy as recent negative factors are largely factored in the price correction.
Ajit Mishra, VP - Research, Religare Broking, is of the view that the market will first react to the IIP data in early trades of the next session on March 14. Besides, development on the Russia-Ukraine crisis and movement of crude will remain in focus.
"On the index front, a decisive move above 16,800 in Nifty would further fuel the recovery, else sideways to negative move will continue. Participants should stay light and wait for clarity," said Mishra.