Sensex inches up 165 points, Nifty flat as inflation concerns linger; small and midcaps slide

Among blue-chip stocks, HDFC Bank, TCS, Maruti, Infosys, and Reliance Industries were top gainers, rising up to 2.3%. On the other hand, SBI, JSW Steel, ITC, NTPC, and Tata Motors closed in the red.

Profit booking continued in the broader, more domestically focussed small- and midcaps on the back of markets regulator flagging likely 'froth and irrational exuberance' in the segments.

The February 2024 CPI data are scheduled to be released by the Bureau of Labor Statistics on Tuesday at 6:00 pm IST. The CPI is expected to have risen 0.4% in February on a monthly basis, and could heavily influence the timing of the Federal Reserve's rate cuts.

Aditya Birla Capital shares closed 2.2% higher after the company said it would merge with its unit Aditya Birla Finance and turn into an operating non-banking financial company from a holding company.

Smallcap firm surged 3% after the company acquired 100% equity of Crestia Polytech and 4 other entities for around Rs 265 crore on a cash-free and debt-free basis.

Sector-wise, Nifty Realty fell 3.7%, led by , Lodha, and . Nifty PSU Bank, Media, Metal, Pharma, and Consumer durables also closed over 1% lower each. In the broader market, Nifty Midcap100 declined 1.4%, and Nifty Smallcap100 fell 2%.

Meanwhile, the market capitalisation of all listed companies on the BSE declined by Rs 4 lakh crore to Rs 285.6 lakh crore.

The market breadth was skewed in favour of the bears. About 3,225 stocks declined, 668 gained, and 74 remained unchanged on the BSE.

Expert Take

“The domestic market witnessed rangebound trading on Tuesday after the previous day’s sharp profit booking. However, mid and smallcap stocks remained pressured, primarily due to apprehensions regarding inflated valuations," said Vinod Nair, head of research, Geojit Financial Services.

"Global sentiment remained mixed as investors awaited key US inflation data, which could offer insights into the Fed's interest rate decisions. Additionally, market participants are anticipating India's inflation figures scheduled for release on Tuesday, to remain consistent with the previous month, which will be at the middle of RBI's tolerance range," he said.

Kunal Shah of LKP Securities said, "The formation of a Doji candle suggests indecisiveness at current levels, and a breakout on either side could lead to trending moves. The immediate resistance for Nifty is at 22,500, and a break above this on a closing basis would signal a resumption of the upward movement. Conversely, the immediate support is positioned at 22,200-22,150, and sustaining above this level could witness some recovery in the index."

Global Market

Global shares edged up on Tuesday ahead of US inflation data that could confirm how soon the Federal Reserve might cut rates. The MSCI All-World index rose 0.1%, encouraged by gains on Wall Street overnight and by a pickup in technology stocks in Asia.

US stock index futures were up 0.2-0.4%, suggesting a pickup at the opening bell later, while in Europe, the STOXX 600 rose 0.4%.

Oil Prices Gains

Oil prices rose in Tuesday trade as tensions in the Middle East continued to spur concern, but gains were capped by bearish demand sentiment ahead of monthly reports from oil agencies.

Brent futures for May delivery were up 48 cents, or 0.6%, at $82.69 a barrel. The April US crude contract rose 40 cents, or 0.5%, to $78.33.

Rupee Ends Flat

The Indian rupee ended little changed after a rangebound Tuesday, ahead of crucial US consumer inflation data that will help investors gauge the timing of interest rate cuts by the Federal Reserve.

The rupee closed at 82.7675 against 82.7575 in the previous session. It traded in a narrow 82.7250 to 82.7725 band for the session.

(With inputs from agencies)