Sensex, Nifty end flat but at new closing highs

S&P BSE Midcap shed 0.8% while S&P BSE Smallcap tumbled 0.6%

Frontline indices pared intra-day gains to end flat but still at new closing highs for the second consecutive day. Nifty50 breached 9,800 for the first time ever in intra-day backed by surge in technology and auto stocks.

Sentiment was also lifted as investors expect inflation for the month of June to be at record low which could lead to a rate cut in the next monetary policy review.

Easing further from May’s 2.18%, Consumer price inflation for June is predicted to cool to 1.70%, below the RBI's medium-term target of 4% for the eighth successive month, according to a Reuters poll.

The CPI will be announced tomorrow, during the day.

S&P BSE Sensex ended at new closing high of at 31,747, up 31 points for the day. Nifty50, on the other hand, also achieved new milestone, setting at new high of 9,786, up 15 points.

In the broader market underperformed the benchmark indices to end in red. S&P BSE Midcap shed 0.8% while S&P BSE Smallcap tumbled 0.6%.

In intra-day, Sensex rose as much as 170 points to hit the record high of 31,885, surpassing its previous milestone of 31768.39 hit yesterday while Nifty gained as much as 59 points to hit 9,830, surpassing the last high of 9,772 hit yesterday.

"Markets settled marginally higher in a volatile trade today, indicating profit taking at higher level.

The sentiment was upbeat in the first half and Nifty scaled above 9,800 mark, thanks to the firm global markets and further rebound in the IT majors.

However, profit taking in the latter half trimmed intraday gains and pushed the Nifty below 9,800," said Jayant Manglik, president, Retail Distribution, Religare Securities.

"Interestingly, the IT majors viz. TCS and Infosys have contributed significantly in the last two sessions, though the result expectations from IT pack is subdued. Amid all, we suggest continuing with the uptrend and avoid contrarian approach," he added.

Buzzing stocks

Bajaj Auto, Tata Motors, Infosys, NTPC, M&M and TCS contributed the most on BSE Sensex while Bharti Airtel, Cipla, Dr Reddy's Coal India and Wipro shed the most on the index.

Kicking off the earnings season, IndusInd Bank remained flat even after it posted a nearly 27% increase in quarterly net profit, helped by higher interest income.

Net profit was Rs 837 crore in its fiscal first quarter ended June 30, compared with Rs 661 crore a year earlier.

Sugar stocks surged after India, the world's largest sugar consumer, raised import tax on sugar to 50% from 40% in an effort to curb cheaper imports.

IT stocks continued to rally with Infosys gaining 1.8% after United States, the sector's biggest export market, announced better-than-expected jobs data for June on Friday.

TCS was also up 1.6% for the day.

Nifty Auto index gained 0.7% lead by 2.4% rise in Bajaj Auto. Other auto stocks, Tata Motors, M&M and HeroMoto Corp also gained between 0.5-2.5%.

State Bank of India pared mornings gains to end in red, down 0.5% even after said its central board approved dilution of its stake in its life insurance arm through an initial public offer for which it has already secured the sectoral regulatory approval.

Bharti Airtel lost 2.6% after the company said it will be investing Rs 2,000 crore over three years in the launch of various digital offerings even as the telco gears up to launch Voice over LTE (VoLTE) across the country by the end of this year.

Shares of carrier SpiceJet fell as much as 3.3% on media reports of former promoter Kalanithi Maran seeking Rs 2,000 crore compensation from the company.

Global markets

Asian shares extended gains on Tuesday and the dollar notched a four-month high against the yen, as investors awaited testimony from Federal Reserve Chair Janet Yellen for clues on when the central bank would tighten US monetary policy.

European bourses were trading mixed following a trend of gains across the US and Asia, as investors kept a close on eye on oil prices.

The pan-European Stoxx 600 was up by 0.22%. FTSE and CAC declined 0.7% and 0,2% respectively while DAX was up by 0.3%.

MSCI's broadest index of Asia-Pacific shares outside Japan was up 0.8%, with technology-led gains on Wall Street sparking sentiment toward Asian tech shares.

Japan's Nikkei stock index ended up 0.6%, buoyed by the weaker yen, while Australian shares erased losses and ended slightly higher.

Photograph: Danish Siddiqui/Reuters