Markets consolidate: Nifty tests 8900 levels, TCS tanks 6%

Markets opened flat on Thursday, with the S&P BSE Sensex and the Nifty50 indices slipping around 0.1% each in early moves to 28,882 and 8,907 levels, respectively. 

Among the Nifty50 stocks, GAIL India, ONGC, Grasim, HDFC, ITC, Reliance Industries (RIL) and Tata Steel were among the key gainers that moved up 0.5 – 2%. On the other hand, TCS, HCL Technologies, YES Bank, Infosys, Tech Mahindra and BHEL were among the key losers, slipping around 1.6 – 6%.

On Wednesday, the S&P BSE Sensex had lost 52 points amid consolidation to end at 28,926, after touching an intra-day high of 29,068. The Nifty50 fell 25 points to close at 8,918, after hitting a high of 8,969.

Given the sharp rally over the past few sessions, analysts expect the markets to consolidate for some time around the current levels. 

“We do not see any major sign of trend reversal. Rather, we expect some consolidation happening in a narrow range of 8980 – 8840 (Nifty) for the remaining part of the week. But, we still believe, lot of individual stocks, especially mid-caps are likely to give spectacular moves whilst the index undergoes this consolidation phase,” said a morning note from Angel Broking.

“Traders are advised to concentrate more on individual stocks which are likely to give higher returns as compared to the benchmark index,” it adds.

ASIAN MARKETS

Asian shares hovered near one-year peaks on Thursday as investors awaited Chinese trade data and a policy meeting by the European Central Bank, where it may announce an extension of its asset buying campaign.

MSCI's broadest index of Asia-Pacific shares outside Japan dipped 0.2%, but that followed four days of gains which took it to the highest since late July 2015.

South Korea's market added 0.4%, having also touched a one-year top this week. Japan's Nikkei lost 0.1%, easing away from a three-month top in the face of a strengthening yen.

China's trade report should offer some guidance on the state of global demand. So far, Asia's trade recession shows no sign of abating and economists polled by Reuters expect China's exports fell 4% in August, a similar rate to July.

OIL PRICES

U.S. crude prices soared nearly 3% on Wednesday in post settlement trading after U.S. inventory data showed what might be the largest weekly stock draw in over three decades.

Nationwide crude inventories plunged by 12.1 million barrels in the week to Sept 2, according to data released late Wednesday from the American Petroleum Institute. If data released on Thursday from the U.S. government confirms the draw, it will be the largest one-week decline since April 1985.

U.S. crude jumped after the data release, rising by as much as 1.6%, or 71 cents, over the next 20 minutes. It settled earlier up 67 cents at $45.50 a barrel, a third consecutive session of gains. Brent futures rose 72 cents to settle at $47.98 a barrel.


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with Reuters inputs