MUMBAI, October 28 (Aalimi Nation) – India's benchmark equity indices ended almost unchanged on Tuesday after a choppy session, as profit-taking in information technology and large banking shares and elevated crude oil prices offset a strong showing by smaller companies.
The 30-share Sensex closed at 73,598.67, down 8.08 points, or 0.01 per cent. During the day it touched a high of 73,762.98 and a low of 73,179.41, a range of nearly 600 points. The Nifty 50 settled at 22,749.75, lower by 3.45 points, or 0.02 per cent. Pharmaceutical, realty and consumer durables stocks outperformed the broader market.
Smaller companies lift the broader market
While the headline indices stalled, the broader market was firmer. The smallcap index rose 2.59 per cent and the midcap index gained nearly 1 per cent, suggesting investors were still willing to pick up shares outside the largest companies even as they trimmed positions in heavyweights.
The flat finish followed Monday's rally, when the Sensex closed at 73,606.75, up 482.92 points, or 0.66 per cent. Tuesday's session therefore handed back none of those gains, but it also failed to build on them.
Crude oil and the Fed weigh on sentiment
Analysts pointed to oil prices as the main external concern. Brent crude was trading near $115.8 a barrel, close to a six-month high. Ponmudi R of Enrich Money linked the elevated prices to worries about energy supply disruptions after attacks on Saudi infrastructure, and said the market's recovery would depend on whether external pressures ease.
India imports most of the crude oil it consumes, so a sustained rise in prices tends to widen the import bill and add to inflation risks. That makes oil a persistent factor for the rupee, corporate margins and the interest-rate outlook.
Investors were also cautious ahead of the US Federal Reserve's policy decision, due on Wednesday. Traders often reduce risk before major central bank announcements, and the Fed's tone on interest rates can influence the flow of foreign money into emerging markets such as India.
Foreign institutional investors were net sellers on Monday, offloading equities worth Rs 1,462.49 crore, according to exchange data cited by market participants.
Vinod Nair of Geojit Investments said Indian equities "ended flat amid a volatile session." Ajit Mishra of Religare Broking said: "The lack of a clear directional trend reflects continued uncertainty."
Both comments point to a market that has no strong view, with traders weighing crude prices, foreign selling and global monetary policy against steady buying in mid- and smallcap shares.
Attention now turns to the Federal Reserve's announcement and any signals on the path of interest rates. A hawkish message could add to pressure on emerging-market assets, while a more accommodating tone could ease the cautious mood that has kept the Sensex and Nifty hemmed in.
Crude oil will remain the other key variable. If Brent holds near its six-month high, analysts expect oil-sensitive sectors and the rupee to stay under watch. Any easing in supply concerns, by contrast, could give the benchmarks room to move out of their recent narrow band.
Investors will also follow the pattern of foreign flows in the coming sessions, since consistent selling by overseas funds has been a recurring drag on the large-cap indices.
