Sensex hits 85,000 level but closes flat as FMCG, banking shares drag

• Sensex scaled the 85,000 level and Nifty breached the 26,000 mark for the first time.
• The markets closed flat on Tuesday after a volatile session.
• While Sensex reached an all-time intra-day peak of 85,163.23, BSE declined by 0.02%.

Sensex scaled the 85,000 level and Nifty breached the 26,000 mark for the first time before paring gains to close flat in a volatile session on Tuesday, dragged by losses in FMCG and select banking shares.

The 30-share BSE benchmark declined by 14.57 points or 0.02% to settle at 84,914.04, snapping its three-day record-breaking run. China announcing stimulus measures to bolster its economy fuelled metal shares.

In the morning trade, the 30-share BSE Sensex scaled the 85,000 level, jumping 234.62 points or 0.27% to scale a new all-time intra-day peak of 85,163.23. The index, however, hit a low of 84,716.07 in the afternoon session due to profit-taking at record levels.

Selling in Hindustan Unilever, Kotak Mahindra Bank and ICICI Bank dragged the key index from the day's highs.

The Nifty eked out gains of 1.35 points or 0.01% to close at a fresh high of 25,940.40. During the day, it climbed 72.5 points or 0.27% to hit a new record intra-day high of 26,011.55.

Vinod Nair, Head of Research, Geojit Financial Services said, "Domestic benchmarks are attempting to sustain new highs, driven by the US Fed's aggressive rate cut. Meanwhile, the Chinese central bank's rate cut, and additional stimulus measures have positively influenced global investor sentiment, resulting in gains for domestic metal stocks."

Conversely, FMCG and banking stocks exhibited declines due to profit-booking at higher levels, he said, adding that in the near term, strong inflows from FIIs, driven by the US Fed's dovish outlook and expectations of a rate cut by the RBI in October, are expected to maintain momentum.

From the 30 Sensex firms, Hindustan Unilever, UltraTech Cement, Kotak Mahindra Bank, IndusInd Bank, Titan, Nestle, Bajaj Finance and Asian Paints were among the biggest laggards.

Tata Steel, Power Grid, Tech Mahindra, HCL Tech, Mahindra & Mahindra and JSW Steel were among the gainers.

The BSE midcap gauge climbed 0.21% while the smallcap index dipped 0.04%.

Among the indices, FMCG declined by 0.75%, telecommunication (0.57%), services (0.45%), financial services (0.40%), consumer durables (0.31%) and bankex (0.30%).

“Technically, the index is oscillating within a rising channel and is trading near the upper trend line resistance of the channel pattern, which is around the range of 25,900-26,000 levels, making them a strong hurdle in the short term. Therefore, on the upside, 26,000 will act as an immediate hurdle for Nifty. If the index sustains above 26,000 it could test the levels of 26,200. On the downside, 25,600 will serve as strong support for the index,” said Hrishikesh Yedve, AVP Technical and Derivatives Research, Asit C. Mehta Investment Interrmediates.

Metal surged 2.78%, power jumped 1.38%, utilities (1.18%), commodities (0.95%) and industrials (0.47%).

"Although markets ended on a lacklustre note after a volatile session, key benchmark indices hit new milestones signifying that liquidity flows has remained strong as investors are confident of India's long term growth story," said Prashanth Tapse, Senior VP (Research), Mehta Equities Ltd.

"Nifty ended on a flat note in a volatile session on Tuesday after crossing 26,000 for the first time. Asian stocks rose on Tuesday to their highest in more than two and half years, heartened by broad stimulus measures from China while expectations for more US rate cuts kept risk sentiment up," Deepak Jasani, Head of Retail Research, HDFC Securities, said.

In Asian markets, Seoul, Tokyo, Shanghai and Hong Kong settled in the positive territory. Shanghai and Hong Kong markets ended significantly higher.

European markets were trading in the green. The US markets ended higher on Monday. Foreign Institutional Investors (FIIs) bought equities worth ₹404.42 crore on Monday, according to exchange data.

S&P Global Ratings on Tuesday retained India's growth forecast at 6.8% for the current fiscal and said it expects the RBI to start cutting interest rates in its October monetary policy review.

Global oil benchmark Brent crude jumped 2.35% to $75.64 a barrel.

Rallying for the third day running on Monday, the BSE benchmark jumped 384.30 points or 0.45% to settle at an all-time high of 84,928.61. The NSE Nifty climbed 148.10 points or 0.57% to close at a record peak of 25,939.05.

With inputs from PTI.

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