After 13 days of breathless march, Nifty and Sensex take a breather

The Sensex and the Nifty 50 closed flat on Tuesday amid a lack of fresh catalysts, while weak global cues kept investors cautious.

The Sensex opened at 82,652.69 against the previous close of 82,559.84 but traded in a narrow range of about 274 points and eventually closed 4 points lower at 82,555.44.

The Nifty 50 opened at 25,313.40 against its previous close of 25,278.70 and touched its intraday high and low of 25,321.70 and 25,235.80, respectively. The index closed just 1 point up at 25,279.85.

Top gainers & losers

Shares of SBI Life (up 1.72 percent), Bajaj Finserv (up 1.40 percent), and ICICI Bank (up 1.39 percent) closed as the top gainers in the Nifty 50 index. On the other hand, shares of Bajaj Finance (down 1.36 percent), ONGC (down 1.33 percent), and Infosys (down 1.20 percent) closed as the top losers in the index. Out of the total 50 stocks, 29 ended in the red in the index.

The domestic market lacks fresh triggers, with most factors, including the 25 bps rate cut by the US Fed, already largely priced in amid stretched valuations. Experts believe a healthy consolidation period is needed to bring valuations back to more comfortable levels.

"Amid mixed global signals and the absence of significant new catalysts, aside from the anticipated Fed rate cut, which is already factored in, the domestic market took a breather," said Vinod Nair of Geojit Financial Services.

Global cues are also muted as investors await US macro prints to gauge the size of the potential Fed rate cut this month. Major global peers, including the top European markets, were in the red when the Sensex closed, as investors focused on the US ISM manufacturing activity survey due later in the day. The US jobs data due on Friday is also a key number that will significantly impact the Fed's monetary policy, which will be announced on September 18.

Investors cautious

“Markets ended flat in a lacklustre trading session as investors exercised caution on the back of weak Asian and European cues. The markets have been hitting new highs in the recent upsurge, and hence investors are a bit sceptical about taking further bullish bets,” said Prashanth Tapse of Mehta Equities.

While the benchmarks ended flat, the mid- and small-cap segments witnessed decent gains. The BSE Midcap and Smallcap indices rose 0.19 percent and 0.54 percent, respectively.

BSE-listed firms' overall market capitalisation (M-cap) rose to nearly ₹465.52 lakh crore from nearly ₹464.85 in the previous session.

Over 250 stocks, including Bajaj Finserv, HCL Tech, ITC, Sun Pharma, Bajaj Holdings, HDFC Life, SBI Life, ICICI Lombard General Insurance Company, Shriram Finance, Trent and United Spirits, hit their fresh 52-week highs in intraday trade on BSE.

Among the sectoral indices on the NSE, Nifty Consumer Durables (up 1.31 percent) and Financial Services (up 0.82 percent) closed with healthy gains.

On the flip side, Nifty Media (down 1.44 percent), Metal (down 0.56 percent), Realty (down 0.52 percent), and Oil and Gas (down 0.52 percent) lost significantly.

Nifty Bank up, PSU Bank down

The Nifty Bank index rose 0.49 percent, while the Private Bank index increased by 0.46 percent. The PSU Bank index, however, lost 0.35 percent.

Shrikant Chouhan Kotak Securities observed that a small candle on daily charts and non-directional activity on intraday charts show indecisiveness between the bulls and the bears.

Mr Chouhan believes that the current market texture is non-directional, and perhaps traders are waiting for either side breakout. "For the day traders now, 25,350 would be the immediate breakout level. Above this, the market could rally up to 25,450-25,500. The dismissal of 25,200 may trigger an intraday correction. Below 25,200, the chances of hitting 25,100 would turn bright. Further downside may also continue, which could drag the market to 25,050," he said.

"The Nifty 50 encountered resistance at 25,300, highlighting strong call option writing at that strike. Moving forward, only a decisive move above 25,300 might trigger a rally toward 25,500. On the downside, support is positioned at 25,200 and 25,000," said Rupak De of LKP Securities.

(By arrangement with livemint.com)