Sensex, Nifty End Little Changed After Volatile Final Hour

Indian equity markets ended little changed in today's session after a volatile final hour of trade, attributed by some to the FTSE rebalancing and by some to the tensions on the borders with Pakistan and China.

The final hour saw the S&P BSE Sensex and NSE Nifty 50 give up modest gains, fall to the day's low and witness a pullback from the lows.

The S&P BSE Sensex ended 0.34% lower at 38,845 while the NSE Nifty 50 was unchanged as compared to its close on Thursday, at 11,516.

The volatile moves were led by the Nifty Bank, which saw a sharper correction, falling as much as 550 points at one point. The index then recovered nearly 300 points from the day's low to end 1.1% lower.

There would be no doubt in anybody's mind that the day belonged to Pharma stocks. Dr Reddy's Laboratories and Cipla were the top two gainers on the Nifty 50 index, ending 9.9% and 7.1% higher respectively. The Pharma index too ended with gains of 5% - the biggest single-day gain in over a month. The index ended at the highest level in nearly five years. All constituents of the Pharma index ended with gains.

Nifty Realty was the other sectoral gainer, ending with gains of 1.9%.

Pressure on banking stocks led to a decline in the PSU Bank index as well, which ended 1.6% lower.

Broader markets were largely in-line with the benchmarks. The midcap index ended little changed while the smallcap index ended 0.4% lower.

The India Volatility Index ended 0.8% lower at 19.94.

Market breadth turned adverse in the final minutes of trade. 990 stocks on the NSE ended with losses while 826 stocks posted gains.

PayTM’s Response

• Worst performing stock on the BSE Midcap index
• Falls as much as 5.5% to Rs 1,666
• Biggest single-day fall in six months
• Down for the third straight day
• Longest losing streak in a month
• Today's volume are 24% higher than the 20-day average
• Down 7% from its 52-week high of Rs 1,805 on September 15, 2020
• Five out of the 11 analysts tracking the stock have a buy recommendation; 5 sell calls
• The stock trades 10.2% higher than its 12-month consensus price target of Rs 1,528.3, implying a negative return potential

The Yellow Metal is headed for its second straight weekly advance as the U.S. Dollar steadies, with investors weighing climbing cases of Covid-19 and lukewarm commentary from the U.S. Federal Reserve.

Earlier this week, Fed officials indicated that interest rates will stay low for years to come, but fell short of tweaking bond purchases as some expected.

"Gold remains stuck in a range thanks to a lack of movement in real treasury yields and demand from Asian retail investors," according to Adrian Ash, Director of Research at BullionVault.

Analysts believe that Gold will retest $2,000/Oz this year as the Fed will eventually increase asset purchases and focus on longer-dated treasuries.

• Top gainer on the Nifty Smallcap index
• Gains as much as 9.9% to Rs 118.75
• Biggest single-day gain in over a month
• Trades at the highest level in a month
• Set to snap a three-week losing streak
• Today's volumes are more than double its 20-day average
• Testing 200-Day Moving Average at 120.2
• Nearly 50% lower than its 52-week high of Rs 224.8 on December 2, 2019
• All five analysts tracking the stock have a buy recommendation
• Return potential of the stock as per Bloomberg data is 27.6%

• Benchmark indices set to post modest gains for the week.
• Nifty up 0.5% at 11,573
• Sensex up 0.24% at 39,073
• Nifty Bank unchanged at 22,331
• Nifty Midcap index up 0.5%
• Nifty Smallcap index up 0.6%
• India Volatility index down 4.5% to 19.19
• Nifty Pharma index extends gains; up 6% - trading at the highest level in nearly five years
• Nifty Realty is the other major sectoral gainer; up 2.6%
• Nifty Auto and Nifty Media up 1%
• Nifty FMCG and Nifty PSU Bank are the sectoral laggards; down 0.6% and 0.5% each respectively
• Dr Reddy's Laboratories remains the top Nifty gainer; up 12.2%
• Hindustan Unilever remains the top Nifty laggard; down 1.5%
• 992 stocks on the NSE trade with gains while 777 decline

The rupee continued to alternate between gains and losses for the seventh straight session, ending today's session with gains, and posting a modest advance for the week.

The currency ended at 73.45 against the U.S. Dollar as compared to Thursday's close of 73.65.

For today's trade, the rupee was the fifth best performing currency in Asia.

“We expect the sideways trend to continue next week as well,” Rahul Gupta of Emkay Global said in a statement. “Unless the support zone of 72.90-73 does not break, the spot will trade higher towards 73.75,” he said.

Even though the rupee posted a modest advance this week, it ended as the second worst performing currency in Asia, only managing to outperform the Hong Kong Dollar.

Yield on the 10-year government bond ended at 5.996% as compared to Thursday's close of 6.033%.

• Dr Reddy's 5,400 Call: Premium up 410% to Rs 103.9. The contract has added 3.2 lakh shares in Open Interest.
• Cipla's 800 Call: Premium up 287% to Rs 23.2. The contract has shed 2.6 lakh shares in Open Interest.
• Lupin's 1,100 Call: Premium up 212.4% to Rs 36.5. The contract has added 2.1 lakh shares in Open Interest.

• Nifty September futures add 2.6% and 3 lakh shares in Open Interest
• Nifty Bank September futures add 13.2% and 2.3 lakh shares in Open Interest

Nifty: September 24 Expiry

• 11,600 Call: Premium up 3.2% to Rs 77.3. The contract has added 12.5 lakh shares in Open Interest.
• 11,500 Put: Premium down 28.7% to Rs 73.5. The contract has added 14.9 lakh shares in Open Interest.
• 11,700 Call: Premium down 3.5% to Rs 37.7. The contract has added 3.3 lakh shares in Open Interest.

Nifty Bank: September 24 Expiry

• 22,000 Put: Premium down 9.1% to Rs 207.1. The contract has added 2.3 lakh shares in Open Interest.
• 22,500 Call: Premium down 12.8% to Rs 297.2. The contract has added 5.8 lakh shares in Open Interest.
• 23,000 Call: Premium down 22.1% to Rs 126.4. The contract has added 4.5 lakh shares in Open Interest.

• Top gainer on the Nifty Smallcap index
• Gains as much as 6.6% to Rs 228.7
• Biggest single-day gain in over three weeks
• Trades at the highest level since July 2019
• Up for the third straight day
• Has gained 10% in the last three trading sessions
• Today's volumes are nearly triple of its 20-day average
• Trades near its 52-week high of Rs 232.5 on August 25, 2020
• Both analysts tracking the stock have a buy recommendation

Benchmark indices in Europe have begun trade on a muted note. The Stoxx 600 index has opened 0.1% lower. Travel and real estate stocks are the top laggards.

The outperformers include miners and technology stocks. The index is still on course for its second straight weekly gain.

Asian markets have had a subdued but positive close, while futures on the Dow Jones trade lower by 40 points.

Brent crude trades 1.1% higher at $43.79 per barrel while Gold trade at $1,953.5/Oz, up 0.5%.

Let's take a look at how benchmark indices in Europe have opened:

• Euro Stoxx 50 down 0.1% at 3,313
• DAX unchanged at 13,207
• CAC down 0.2% at 5,030
• FTSE 100 down 0.2% at 6,037
• IBEX 35 down 0.5% at 7,052