The equity, F&O, and currency markets will remain closed on 19th August 2021, on account of Moharram. Commodity markets will be closed for the first half and trading will be open only in the evening session (5:00 pm onwards).
After hitting new highs in early trade on August 18, benchmark indices saw early gains wiped out due to profit-taking at higher levels. Sensex slipped 489 points from its record highs of 56,118 to end at 55,629, lower by 162 points or 0.29% while Nifty50 also dropped below the 16,600 mark to settle at 16,568, declining 45 points or 0.28%. Earlier in the day, Nifty hit a new peak of 16,701.
“The markets have shown some buoyancy since the beginning of August this year rising by 4.6%, primarily led by the technology pack which has continued to outperform, rising by a huge 8.5%. The strength seen in consumers and banking stocks recently has been modest. Cyclical sectors such as reality, metals, mid-cap, small cap indices and high beta sectors have seen corrections or underperformance. Metal sector that had seen a rebound towards the end of July this year has seen some flattening. It has been the strongest performer since the Covid-low in March last year with a rebound of 290%, followed by Small cap (213%) and Technology (200%),” said Dhananjay Sinha, MD & Chief – Strategist, JM Financial Institutional Securities.
The rally is not broad-based, which reflects a lack of conviction. The truncated nature of market performance reinforces the point that the pure liquidity-driven rally and multiple expansion are probably behind us. Global inflexions including rising evidence of peaking global growth which is evident now in China and US, US tapering – the stance of US central banks and correction in commodity price bubbles will define the market conditions, going forward. High inflation permeating into most countries, especially developed markets, is also significantly contributed by the persistence of supply chain disruptions, which have compounded the impact of post-pandemic demand recovery.
While the common belief is that the disruption will linger on for a long time, our view is that we will see evidence of improvement in the coming months, running up to the end of 2021. This in our view should result in a correction in commodity prices; thus providing support to export-oriented and resource-intensive manufacturing sectors, especially in the consumption space, Sinha added.
On the sectoral front indices ended mixed. Nifty FMCG index advance the most up by 0.69%, followed by the Nifty Pharma index rose 0.21% and Nifty IT continued it uptrend and ended with gains of 0.10%.
On the downside, the Nifty Bank and Nifty Metal indices was the worst performer as they plunged 0.87% and 0.81%, respectively. Whereas the Nifty Realty index slipped 0.77%, Nifty Auto was down 0.20%.
The broader market ended mix as on one end the BSE MidCap index advanced 0.26% to 23,121. While on the other end the BSE SmallCap index lost 0.18 and settled at 26,237.
The market breadth remained negative as 2,087 shares declined compared to 1,094 advanced and 114 remained unchanged.
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