Nifty Ends Higher but Liquor, Finance Stocks Drag
The Indian benchmark indices ended modestly higher on Wednesday, with the Sensex rising 123 points to close at 82,515, and the Nifty 50 increasing 37 points to finish at 25,141. Despite this upward momentum, the broader market sentiment was weighed down by weakness in various sectors, particularly liquor and power shares.
The IT and auto stocks, which have been driving the market’s recent rally, continued to be major contributors to the gains. The Nifty IT index rose 0.9% to 28,655, led by gains in the likes of TCS, Infosys, and Wipro. The Nifty Auto index also rose 0.8% to 13,464, driven by strength in shares of Maruti Suzuki, Tata Motors, and Hero MotoCorp.
However, the liquor and power sectors were the biggest drags on the market. The Nifty Liquor index fell 2.4% to 6,344, with shares of United Spirits, Pernod Ricard, and Diageo declining due to concerns over the impact of COVID-19 on consumer sentiment and demand. The Nifty Power index also fell 2.3% to 4,654, with shares of NTPC, Power Grid, and Bharat Heavy Electricals Ltd. declining due to regulatory issues and concerns over the sector’s growth prospects.
The finance sector also witnessed significant weakness, with the Nifty Finance index falling 1.4% to 24,452. Shares of State Bank of India, HDFC Bank, and ICICI Bank declined due to concerns over the impact of the lockdown on loan growth and profitability.
Despite these headwinds, the overall market sentiment remained upbeat, with many analysts forecasting an upside continuation. The Securities and Exchange Board of India (SEBI) has been taking steps to boost market sentiment, including relaxing listing norms for startups and allowing foreign investors to participate in the Indian bond market.
“Despite the near-term challenges, we remain positive on the Indian market’s growth prospects in the long term,” said a senior analyst at a leading brokerage firm. “The government’s efforts to boost the economy, combined with the resilience of the IT and auto sectors, will continue to drive the market’s upward momentum.”
In other news, the Indian rupee strengthened against the US dollar, with the rupee trading at 75.65 against the dollar. The yield on the 10-year government bond rose to 6.13%, reflecting market expectations of a recovery in the economy.
In conclusion, while the Indian benchmark indices ended modestly higher, the broader market sentiment was weighed down by weakness in the liquor, power, and finance sectors. Despite these challenges, many analysts remain positive on the market’s growth prospects in the long term, driven by the government’s efforts to boost the economy and the resilience of the IT and auto sectors.
