Market

Sensex, Nifty flat dragged by bank stocks: Key factors keeping market subdued

NEW DELHI: Selling in banking and financial stocks kept benchmark indices subdued on Tuesday. Worries over rising inflation in the US and talks of tapering put investors on edge who are waiting for a clearer picture to emerge.

However, as the indices have been hovering around all-time high levels, many quarters of investors find valuation too stretched to buy. Some of them have started piling cash, anticipating a correction.

“The strongest headwind for the market now is the continuous FII selling, which is logical in the context of the high valuations. With strong DII buying and overconfident retail activity, FIIs are now in a position to sell aggressively without pulling the markets down significantly. The package announced by the FM yesterday is more relief than stimulus,” said VK Vijayakumar, Chief Investment Strategist at Geojit Financial Services.

How are the bluechips doing?
After opening in the green, benchmark indices wobbled around the flatline. At 9.30 am, BSE flagship Sensex was up 32 points or 0.06 per cent to 52,768. NSE benchmark Nifty was up 12 points or 0.08 per cent to 15,827.

In the 50-share pack Nifty,

was the biggest gainer, up 1.24 per cent. UPL, , Power Grid, Tata Motors, HCL Tech, TCS, Reliance Industries and IndianOil were among other gainers.

ONGC was the top loser in the pack, down 0.90 per cent.

, M&M, Kotak Mahindra Bank, Maruti Suzuki, Hindalco, HDFC Life Insurance, Britannia and JSW Steel were other losers in the pack.

FACTORS DRIVING MARKETS

Bad news

Another hawk appears: The Fed has made “substantial further progress” towards its inflation goal in order to begin tapering asset purchases, Fed Bank of Richmond President Thomas Barkin said on Monday.

Europe also weighs in: European Central Bank policymakers on Monday started a public debate about ending emergency bond purchases launched at the start of the coronavirus pandemic last year, with fault lines already emerging between so-called hawks and doves.

Covid cases spike: Australia is battling small but fast growing outbreaks with snap lockdowns in several cities, while Indonesia is also grappling with record-high cases. Malaysia is set to extend a lockdown and Thailand has announced new restrictions.

Broader markets

Broader market indices were trading higher, outperforming their headline peers in morning trade. Nifty Smallcap was up 0.26 per cent while Nifty Midcap rose 0.01 per cent. Broadest index on NSE, Nifty 500 advanced 0.06 per cent.

Godrej Agrovet, Laurus Labs, Bharat Forge, Graphite India, SpiceJet and Firstsource Solutions were gainers from the space, while

, PNB Housing, Future Retail, Adani Total Gas, Bombay Burmah Trading and JSW Energy were under selling pressure.

Global markets
MSCI’s broadest index of Asia-Pacific shares outside Japan was trading 0.11 per cent lower, hovering near recent highs, though momentum has stalled as some countries re-impose lockdowns to contain the spread of the Delta virus variant.

Australian and Japanese shares took the brunt of early losses, with the ASX/200 index down 0.76 per cent and the Nikkei falling 0.91 per cent. The South Korean market was 0.39 per cent lower, and Chinese stocks were also down 1.06 per cent.

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