Markets range bound on lack of trigger

The markets remained range bound on Wednesday for the second consecutive session in the absence of any fresh trigger. The Sensex gained 94.71 points (0.25%) to close at 38,067.93 whereas the Nifty was up by 25.15 points (0.22%) to close at 11,247.5. The benchmarks ended September in the negative territory for the first time since March.

The Sensex and Nifty declined by 1.9% in September after the Wall Street and other global markets slipped last week. This correction was largely triggered by the second wave of novel coronavirus in Europe and the dwindling prospects of a quick economic recovery. Additionally, the market volatility has also risen because of upcoming US Presidential elections and the elusive fiscal stimulus in the US.

The Asian markets were cautious and range bound with China’s Shanghai Composite down by 0.2% and Taiwan’s Taiex up by 0.3%. South Korea’s Kospi was up by 0.86%.

Deepak Jasani, head – retail research, HDFC Securities, said: “An early boost to Asia’s emerging stock markets from Chinese economic data faded on Wednesday as a chaotic first US presidential debate weakened the sentiment globally and traders reined in bets ahead of several regional market holidays.”

Analysts at Credit Suisse believe that the correction in S&P 500 makes it a case for further buying. In its note, Credit Suisse said, “We would buy into the weakness for the following reasons, overall fiscal and monetary policy remains much more stimulatory than it was post GFC; the ERP is at 7.3% (and should be closer to 5% even if ISM falls to 55); excess liquidity is supportive and we are seeing the first signs of a bond to equity switch; we stick to an end 2021 target of 317 (15% upside potential) for MSCI AC World ex US and see 3% upside by the end of this year.”

The futures and options segment on the NSE witnessed a turnover of Rs 22.49 lakh crore, against the six-month average of Rs 15.53 lakh crore. The cash market saw a turnover worth Rs 48,594.43 crore, against the six-month average of Rs 53,128 crore.

On Wednesday, FPIs sold stocks worth $196.8 million, according to provisional data and domestic institutional investors bought stocks worth $77.9 million.

Major gainers on the Nifty were Grasim, Tech Mahindra, Titan, Nestle India, and Dr Reddy’s Laboratories, up by 2.9%, 2.79%, 2.5%, 1.93% and 1.92%. Big losers were BPCL, Bharti Airtel, Tata Steel, JSW Steel and IndusInd Bank, down by 9%, 3.6%, 3.07%, 3.06% and 2.14%.