Sensex, Nifty end flat after scaling fresh highs; HDFC Bank plays spoilsport

Indian headline indices traded within a range on Thursday but managed to scale fresh closing highs. The 30-stock S&P BSE Sensex reached a lifetime high of 80,393 before closing at 80,050, up by 63 points or 0.08%. Meanwhile, the broader Nifty peaked at 24,401 during the session and ended the day at 24,302, registering a gain of 16 points or 0.06%.

Top gainers & losers
The Nifty breadth was skewed in the favour of the bears, with 27 stocks ending in the red, while 23 ended in positive territory. Top gainers at the close included Tata Motors, HCL Technologies, ICICI Bank, Sun Pharmaceuticals, and Tata Consultancy Services (TCS).

Conversely, HDFC Bank, Bajaj Finance, Adani Enterprises, Wipro, and Tech Mahindra were among the top losers.

Out of the 16 sectoral indices, 11 closed higher, with Nifty Pharma, Nifty IT, and Nifty Auto emerging as top performers with gains of up to 1.4%. On the downside were Nifty Media, Nifty Financial Services, and Nifty Metal.

Global Market Check
Except for China's Shanghai Composite, which saw a 0.83% decline, most major Asian indices closed in positive territory. Japan's Nikkei 225 led with a 0.83% gain. Hong Kong's Hang Seng index rose by 0.28%, and Singapore's FTSE Straits Times Index surged up to 0.71%.

UK's FTSE was up by 0.70%, Germany's DAX showed a gain of 0.29%, and France's CAC 40 and Stoxx 600 both rose by 0.72%. Spain's IBEX closed lower by 0.25%

Expert Take
Commenting on the day's action, Vinod Nair, Head of Research, Geojit Financial Services said that defensive bets on largecaps like IT and pharma gained momentum due to the diminishing US inflationary pressure on the day when the markets ended flat. The improvement in QoQ earnings outlook and a resultant sharp fall in the US 10-year bond yield was the trigger, he said.

"The buoyancy in government spending and the green shoots in corporate earnings are now supporting the premium valuation. Return of FIIs to the domestic market and expectation of a rate cut in September are supporting market sentiment," Nair said.

Currency Update
The Indian rupee closed slightly stronger on Thursday, supported by firmer Asian peers amid a decrease in US bond yields. The rupee ended at 83.4925 against the US dollar, a slight improvement from its previous close at 83.53, according to Reuters.

The dollar index was at 105.2, while Asian currencies, including the Chinese yuan up about 0.1% and the Japanese yen nearly 0.3% higher, strengthened. Recent soft US economic data alleviated pressure on the yen and yuan, which had kept Asian currencies on the defensive in recent sessions.

Elevated demand to buy dollars at the Reserve Bank of India's daily reference rate, called the "daily fix", slightly weakened the rupee earlier in the session, this report said quoting traders.

The rupee ticked up after demand eased later in the session, with mild dollar sales from foreign banks also helping the currency, a foreign exchange trader at a state-run bank said. Meanwhile, dollar-rupee forward premiums rose with the 1-year implied yield up 2 basis points at 1.64% aided by a decline in U.S. bond yields.

Crude Impact
On Thursday, crude oil prices retreated, with US WTI oil contracts trading at $83.35, down by $0.53 or 0.63%, and Brent oil futures near $86.85, lower by $0.49 or 0.56%. Meanwhile, on the MCX, July Crude Oil futures traded at Rs 6,961 per BBL, a decrease of Rs 10 or 0.14%.

The rise in crude oil prices typically raises concerns in equity markets due to inflationary pressures it may trigger.