Despite metal stocks adding muscle, Nifty and Sensex slip from peaks

After scaling fresh record highs in the early trade, the Sensex and the Nifty closed in the red on Friday, due to profit booking at higher levels. 

Today was the sixth consecutive session wherein the frontline indices set fresh records. This remarkable performance was primarily fuelled by a robust rally in metals and financial stocks, which have seen significant buying interest amid improving global and domestic cues. The IT sector contributed to the rally.

The Nifty 50 rose by 0.23%, reaching a fresh all-time high of 26,277 during the trade before closing with a 0.14% drop at 26,199. Notably, this marked the third straight session where the index closed above the crucial psychological level of 26,000.

Similarly, the Sensex hit a new peak of 85,978, climbing 0.16%. It ended the session at 85,615, a 0.30% fall from its previous close but stayed above the 85,000 mark for the third consecutive session.

1.2% gain in a week for both indices

For the week, both indices posted gains of over 1.2%. While large-cap stocks extended their rally, midcap and smallcap stocks lagged due to valuation concerns. The Nifty Midcap 100 ended the week with a modest gain of 0.30%, whereas the Nifty Smallcap 100 fell by 0.47%.

In today’s session, 32 out of the 50 Nifty constituents finished in the positive territory. BPCL led the rally, with a 6.4% gain, followed by pharma stocks Cipla and Sun Pharma, which rose by 2.6% and 2.8%, respectively.

Other top gainers included Reliance Industries, Hindalco Industries, Coal India, Titan Company, HCL Technologies, Bajaj Finserv, Grasim Industries, Asian Paints, and Eicher Motors, all closing with gains exceeding 1%.

Among the sectoral indices, Nifty Oil & Gas topped the charts with a 2.41% gain, followed by Nifty PSE, Nifty Healthcare, and Nifty Pharma, which recorded gains of 1.49%, 1.19%, and 1.13%, respectively.

Metals glitter with China push

Metal stocks, including Vedanta and Nalco, surged up to 3% in today’s session after the People’s Bank of China earlier this week cut the reserve requirement ratio for banks by 50 basis points, marking the second cut this year.

This move is expected to release 1 trillion yuan in capital, according to reports. Additionally, the central bank lowered the 7-day reverse repo rate by 20 basis points to 1.5%, signalling that rates for 14-day reverse repos and temporary repos will also be adjusted to match the new 7-day rate.

Analysts noted that these measures aim to support stable economic growth. Chinese authorities have been employing both fiscal and monetary strategies to revive the economy and meet their growth target of around 5% for the year.

China's monetary stimulus has supported metal stocks that were already climbing due to the aggressive rate cuts by the US Federal Reserve.

Against this backdrop, prices of industrial metals such as aluminum, copper, and nickel reached multi-month highs in recent trading sessions. As the world’s largest consumer of base metals, accounting for roughly 50% of global output, any recovery in China’s domestic demand is expected to have a substantial impact on the global base metals market. For the week, the Nifty metal index has gained 7%. 

Accenture's Q4 results lift IT index

Shares in the Nifty IT index surged by 1.5% today, following Accenture's strong Q4 earnings report. Emkay Global noted that while Accenture's projected annual revenue growth of 3%–6% fell short of the average estimate of 5.9%, it still reflects a solid beginning and a stable demand environment.

According to Jefferies, Indian IT companies need to focus on expanding their AI-driven services, which played a crucial role in helping Accenture surpass earnings forecasts, to effectively tap into clients' IT spending.

Hopes of MSP hike sweetens sugar stocks

Sugar stocks jumped up to 11% in today's trade, following remarks by Indian Food Minister Pralhad Joshi. On Thursday, Mr Joshi indicated that the government is considering increasing ethanol prices for the 2024-25 season, along with a review of the minimum selling price of sugar and sugar exports for the same period.

The minister mentioned that a committee of secretaries is currently discussing a proposal to raise the minimum selling price of sugar.

(By arrangement with livemint.com)