Market wrap: Shares pared gains as investors booked profits in financials

The Nifty 50 index closed flat at 18,118.30 on Tuesday, while the S&P BSE Sensex rose 0.06% to 60,978.75. Both the benchmarks were up around 0.5% during the session.

Their intraday trajectory followed that of highly-weighted financials, which closed 0.01% higher, paring most of the intraday gains after rising as much as 0.62% during the session.

Private lender Axis Bank Ltd fell 2.41% on Monday despite posting a stronger-than-expected jump in third-quarter profit. The stock had gained 2.14% in each of the last five sessions ahead of its results.

Narendra Solanki, head of fundamental research at Anand Rathi Shares & Stock Brokers, said, “The third quarter earnings from the financial sector have been strong. Fundamentally, there is nothing wrong with the space.”

“Volatility driven by investors looking to profit from financials as strong earnings have been priced in,” Solanki said.

Analysts say the market may see further strength ahead of the Union Budget, which may require higher allocations for social sector programmes.

Twenty-one constituents of Nifty 50 advanced, with Tata Motors, Maruti Suzuki, Bajaj Auto being top gainers.

Siddharth Khemka, head of research (retail), Motilal Oswal Financial Services, said the Nifty50 will continue to trade in a range of 450 points between 17,800 and 18,250 ahead of the Union Budget.

Among key sectoral indices, auto sector gained 1.28% following strong third quarter numbers from Maruti Suzuki.

The IT index rose 0.77%, tracking gains in the technology-linked NASDAQ Composite Index (up 8.6% so far in 2023) on easing global recession concerns and strong quarterly earnings.

Flash PMI data coming from the US and eurozone in the following days are expected to show a less severe economic contraction in December than in the previous month.