Equity barometer Sensex ended with decent gains on February 2, extending its winning run into the fourth consecutive session while the Nifty50 ended lacklustre dragged by the poor show of Adani stocks.
The 30-share pack Sensex ended 224 points, or 0.38 percent, higher at 59,932.24 while the Nifty50 closed at 17,610.40, down 6 points, or 0.03 percent. It was the second consecutive day of losses for Nifty50.
The BSE Midcap index closed with a gain of 0.21 percent while the BSE Smallcap index rose 0.36 percent.
As many as 169 stocks, including Adani Enterprises, Adani Green Energy, Adani Ports, Adani Transmission, Jubilant FoodWorks and Relaxo Footwears, hit their 52-week lows in intraday trade on BSE.
The rupee fell 25 paise to close at 82.18 per dollar.
The Adani-Hindenburg saga continues to weigh on market sentiment. Shares of Adani Enterprises and Adani Ports ended as the top two losers in the Nifty50 index.
Shares of Adani Enterprises plummeted 26.70 percent today on NSE. In the previous session, on February 1, the stock had cracked 28.20 percent. Shares of Adani Ports closed 6.60 percent lower today. In the last session, they had tanked by 19.18 percent.
However, pro-growth Budget 2023 and positive global cues have offered significant comfort to the market.
While analysts and brokerage firms have termed Budget announcements positive for the market, the less hawkish tone of the US Fed has also offered relief to investors.
The US Federal Reserve announced an expected 25 basis points interest rate increase on February 1. However, it added that benchmark interest rates would be increased as long as required.
Top Sensex gainers: Shares of ITC, IndusInd Bank and Hindustan Unilever ended as the top gainers in the Sensex index.
Top Sensex losers: Shares of NTPC, HDFC and Titan ended as the top losers in the Sensex index.
Sectoral picture
Among the sectors, Nifty FMCG jumped 2.28 percent. Analysts said FMCG stocks are gaining because of the budgetary proposal on changes in direct taxes under the new regime. A rebate in taxes is considered positive for FMCG companies since they increase the disposable income of consumers which boosts demand and consumption.
Nifty IT gained 1.83 percent. As most negatives are on the table for the sector, IT stocks are witnessing traction because rate hikes are expected to get slower further which will weaken the prospects of a recession in the West.
On the flip side, the Nifty Metal index cracked 4.35 percent while the Oil & Gas index also fell about two percent.
Analysts' views on markets
"Despite a growth-oriented budget, drop in crude prices and upside in the global market, the domestic market is not able to gain because of the Adani saga having a ripple impact on the investors," said Vinod Nair, Head of Research at Geojit Financial Services.
"In addition, the premium valuation of India continues to weigh down the performance compared to other emerging markets which are expecting an upside in the economy. The global markets are positive in the assumption of being in the last phase of the rate hikes," Nair said.
Shrikant Chouhan, Head of Equity Research (Retail) at Kotak Securities also pointed out that the rout in Adani group stocks continued playing havoc as benchmark indices gyrated sharply intraday before recouping lost ground on buying in IT and banking stocks.
"Power, energy, oil and gas, and utility stocks were plundered as investors continued to exit in view of dampening sentiment. More than external factors, investors' sentiments have been hurt by the domestic mood," said Chouhan.
Technical views by experts
Despite multiple attempts, Nifty couldn’t sustain the gains on February 2. Gaurav Ratnaparkhi, Head of Technical Research, Sharekhan by BNP Paribas highlighted that the hourly chart shows that the 20 HMA acted as a cap on the higher side, whereas the hourly lower Bollinger Band offered support to the index.
"17,650 – 17,450 is the tight range within the overall short-term range of 17,350-18,000. The bulls can get some relief if the index crosses the 17,650-17,700 zone on the higher side," said Ratnaparkhi.
Rupak De, Senior Technical Analyst at LKP Securities observed that the benchmark Nifty has been hovering within a falling channel, where it has found support at the lower band of the said channel.
"The trend looks negative, with the RSI trending upside down. A resistance level on the higher end is visible at 17,750, above which the Nifty may move up towards 17,950. On the lower end, support is pegged at 17,450, below which the correction may resume," said De.
Key market data
Disclaimer: The views and recommendations given in this article are those of individual analysts. These do not represent the views of MintGenie.
