Indian Stock Market : On Tuesday, September 17, almost 300 stocks achieved the 52-week high in intraday trade at Bombay Stock Exchange. In the day, there were several blue chip companies that have witnessed gains; among them are ICICI Bank, HCL Technologies, Bharti Airtel, and Tech Mahindra. After seeing mixed performances from midcap and small cap stocks overall, the market went through a positive streak in the day to close Sensex and Nifty 50 for the second successive session.
The Rs 28.5 lakh-crore-cap-stock Key Performers entered a new high at the 52-week mark, showing the confidence reposed by investors in these established names. The list of the prominent stocks that touched this new high includes:
ICICI Bank
HCL Technologies
Bharti Airtel
Tech Mahindra
Bajaj Auto
Hero MotoCorp
Apollo Hospitals
Britannia Industries
Dabur
Marico
Cipla
Divi’s Laboratories
LTIMindtree
Persistent Systems
Naukri (Info Edge India)
Shriram Finance
Trent
United Spirits
These stocks were better placed amid a positive domestic market setting, which was boosted by the international leads in anticipation of the U.S. Federal Reserve (Fed) policy announcement that would come on Wednesday. The improving sentiments in large-cap stocks were also influenced by the expectations of rate cuts that the Fed could unleash, provided that the declaration is affirmative, making the market even more confident.
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Indian Stock Market Expectation of Rate Cuts by the Fed Finds its Support Among Market Sentiments
The rally in the Indian stock market is largely being supported by widespread expectations of an uninterrupted 25 bps rate cut from the U.S. Fed. Said that, market participants continue to be cautious as the cut is already factored into the stock prices and, hence, may not muster much positive effect on the market. Investors are rather keenly focused instead on whether there is any possibility of more aggressive cuts.
Speculations that the U.S. central bank may opt for a more significant cut, perhaps 50 bps, have been in circulation following a series of media reports which revived the prospect of aggressive easing by the Fed. A report by Reuters noted that futures markets are fully pricing in a quarter-point cut and now imply nearly a 70% chance the Fed could ease rates by half a percentage point, a sharp increase from the 15% likelihood reported last week.
In equities, benchmarks gain amid positive sentiment.
The Sensex and Nifty 50 remained on the upswing for a second successive session that reflected an overall market momentum. The Sensex closed higher by 91 points at 83,079.66, or 0.11%, while Nifty 50 settled at 25,418.55, up by 35 points, or 0.14%. It underlined that optimism about large-cap stocks had mainly remained the biggest beneficiary of recent market movements.
The mid-cap and small-cap areas of the market did not gain from this one way. BSE Midcap Index dropped 0.08 percent and BSE Smallcap Index dropped 0.13 percent. This reflects that the smaller ones were lagging as compared to their larger counterparts, and it might be showcasing a more risk-averse attitude by the investors, focusing more on established blue-chip names during the times of uncertainty in the global arena.
Sector-level Analysis: IT, FMCG and Private Bankers boost the market
As per market reports, the three best performing sectors were IT, FMCG, and Private Banks. All these sectors have received huge buying interest from both domestic and institutional investors.
IT: HCL Technologies and Tech Mahindra hit their 52-week highs following the performance of IT that continues to enjoy strong demand for technology services at both domestic and global level. In the process, with a further increase in relevance of digital solutions in business, this has ensured good prospects in terms of growth.
FMCG Sector: The FMCG sector too was on fire, as companies such as Britannia Industries, Dabur, and Marico are experiencing their highest levels. The sector has been sound, as even in the very uncertain economic climate, the demand from consumers hasn’t derailed.
Private Banks: ICICI Bank was one of the prominent gainers in the banking space as private banks continue to attract the investor’s attention by virtue of healthy balance sheets and scope for improvement in the lending activity. The sector had moved out of the bleak economic situation successfully.
Top Gainers and Losers: A Mixed Performance Across Sectors
The key gainers on the Sensex were Bharti Airtel, NTPC and Mahindra & Mahindra, which ended higher on strong investor demand in their respective sectors.
Bharti Airtel: Share prices of the telecom giant touched an almost one-year high as investors continue to stay upbeat with the growth prospects, specially in its data and digital services segments.
NTPC: Among India’s biggest power producers, NTPC didn’t miss out as investors were willing to bet on continued energy demand in the fast growing economy.
Mahindra & Mahindra: In terms of stocks, automotive and farm equipment manufacturer Mahindra & Mahindra also performed well with strong demand for its vehicles fueling a move in its stock.
This led to some stock declines while some saw appreciation; the top losers in the Sensex index were Tata Motors, Adani Ports, and JSW Steel. These companies’ stock witnessed slight decline as investors started taking profits of recent gains.
Market capitalisation and institutional flows witnessed a slight decline in total value.
The total market capitalisation of BSE-listed firms registered a minimal fall to ₹ 470.3 lakh crore from ₹ 470.5 lakh crore in the previous session. This marginal drop in market capitalisation, therefore, reflects mixed performances of mid-cap and small-cap stocks that offset gains seen by large-cap stocks.
Despite this, the market still remains supported by strong institutional inflows as foreign and domestic institutional investors continued to pump money into the market. The sustained inflows of institutional investors are an essential factor in the uptrend of the market.
Expert Thoughts: What’s Next from the Fed?
According to Vinod Nair, head of research at Geojit Financial Services, the market is moving on because the Indian market had slight positive momentum, given the expectations on the U.S. Fed to roll out a rate cut cycle. Though 25 bps has already been factored into the market, investors await the signals provided by the Fed for the health of the economy in the US and the further cuts on rates it may propose.
Nair also noted that the institutional flows still continue to deliver strength as they have been the primary drivers of the performance of the local markets. Secondly, there is strong buying interest in large cap stocks, especially in IT, FMCG and Private Banking stocks, which have shown a continuous trend of outperforming.
Conclusion: When Uncertainty Calls, the door remains open for Optimism
On September 17, the Indian stock market continues with a mixed feel of optimism and caution. Large-cap stocks did well, driven by positive global cues and strong inflows from institutions, while mid- and small-cap stocks had problems. The Indian market is eagerly looking forward to an announcement by the U.S. Fed on policy as any specific detailed clarity on the stance of the central bank awaiting such an announcement.
IT and FMCG stocks are expected to continue to attract more investor interest in this risky world, whereas prospects would be there for more volatility with smaller companies in the short run.