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Sensex inches lower; midcaps, smallcaps rally on valuation comfort

NEW DELHI: Following a volatile session on Dalal Street, BSE benchmark Sensex ended marginally lower while its counterpart Nifty eked out small gains. Bank and IT stocks were the top drags, while index heavyweights such as RIL, HDFC Bank and Maruti Suzuki lent some support.

Interestingly, the market breadth leaned in favour of the buyers, indicating underlying bullishness in the market. The advance-decline ratio on BSE stood close to 3:2.

The broader market fared better than benchmarks with BSE Midcap and Smallcap indices, ending 0.29 per cent and 0.75 per cent higher, respectively.

BSE barometer Sensex ended at 41,558, down 17 points or 0.04 per cent while NSE Nifty closed at 12,255.85, up 10.05 points or 0.08 per cent higher.

Mixed global market sentiment and crude at three-month high kept investors on the sidelines.

Market at a glance

In the 30-pack Sensex, 18 stocks ended in the green and 12 in the red. ICICI Bank, State Bank of India, TCS, Asian Paints and Axis Bank were among the top losers on the index.

Meanwhile, Hero MotoCorp, Nestle India, M&M, Bharti Airtel and Tata Steel were the top gainers, rising up to 1.47 per cent.

In the BSE sectoral space, five out of 19 sectors ended in the red with BSE IT leading the charge, down 0.29 per cent. BSE Auto, up 1.36 per cent, was the best sectoral performer. Auto stocks gained ahead of the release of the auto sales numbers for December, slated to be out on January 1. BSE Metals, up 1.25 per cent, was the second-biggest gainer in the BSE sectoral landscape.

Expert Take:

Market was rangebound, premium valuation and lack of fresh triggers influenced investors to take a cautious approach on heavyweights. But reasonable valuation of midcaps and smallcaps attracted inflows leading to outperformance in the broader market. We expect this polarised valuation not to sustain as there could be a shift of money from the overvalued largecaps to midcaps in 2020.

– Vinod Nair, Head of Research at Geojit Financial Services

Global Markets

A broad gauge of Asian share markets rose to an 18-month high on Monday as Chinese equities gained, while oil touched three-month highs on a combination of US crude inventory drawdowns, trade optimism and unrest in the Middle East. Japan’s Nikkei stock index finished its last trading day of the year down 0.76%. The index gained 18.2 per cent in 2019 after dropping 12.8% last year. The pan-European STOXX 600 index began a holiday-shortened week with a 0.4% fall, with France’s EssilorLuxottica among the biggest drags on the index.

Source: Economic Times