Sensex, Nifty end at fresh closing highs, but on negative market breadth

Broader markets underperformed with Midcap and Smallcap indices losing 1% and 1.5%, respectively

The benchmark indices extended gains for the third straight session to end at fresh closing highs, but the midcap and smallcap indices snapped two-session long rally to finish lower. 

The S&P BSE Sensex ended at 31,109, up 81 points, while the broader Nifty50 settled at 9,604, up 10 points. 

In intraday trade, the 30-share Sensex rallied as much as 186 points to hit its all-time high of 31,214, while the broader 50-share Nifty gained 42 points to touch its lifetime high of 9,637.

In the broader market, the S&P BSE Midcap and the S&P BSE Smallcap indices shed 1% and 1.5%, respectively. 

The breadth, indicating the overall health of the market, remained weak. On the BSE, 1,799 shares declined and  861 shares rose. A total of 191 shares were unchanged.

"Liquidity is extending its gain to consumer oriented stocks and sectors, given positive development on upcoming monsoon. At the same time, dichotomy was seen in pharma, IT and high beta stocks due to headwinds on business outlook and NPA issues. This positive trend can continue in the near-term given strong domestic and FII inflows even though the valuation is high due to attractive outlook for earnings growth in the future," said Vinod Nair, Head of Research, Geojit Financial Services.

Buzzing stocks

Consumer goods stocks such as Dabur, Hindustan Unilever and ITC rallied up to 3% pushing the Nifty FMCG index higher by over 1%. 

Healthcare stocks were the biggest drag on the index, after Sun Pharmaceutical Industries fell as much as 13.2% to a near four-year low after the company on Friday reported a 14% fall in March-quarter profit. The company said its US sales may fall this year on lower drug prices. The stock settled at Rs 500, down 12%.

Shares of Reliance Anil Dhirubhai Ambani Group (ADAG) companies came under severe pressure, falling by up to 24% on BSE in intra-day trade on concerns whether the group would be able to repay the high debt to banks and poor March-quarter results. 

Reacting to poor Q4 results, the stock of RCom tanked nearly 24% to Rs 19.70, also its record low on the BSE. Reliance Infrastructure, Reliance Capital, Reliance Power and Reliance Defence, the other ADAG group stocks, too have fallen in the range of 4% to 8% on BSE.

Software services provider Tech Mahindra hit over 3-1/2 year low after posting a 33% fall in consolidated profit for the March-quarter, missing analysts' estimate. The stock ended at Rs 380, down 11%. 

Global markets

Concerns over Italy's banks and Britain's national election campaign dominated holiday-thinned European financial markets on Monday, prodding stock markets lower after Asian share indices fell back off 2-year highs.

Sterling, hammered by a slump for Prime Minister Theresa May's Conservatives in opinion polls last week, recovered some ground after weekend numbers confirmed the trend but showed her still on course to win next week's vote.

European share prices were a touch lower, led by a half-percent fall in banking shares as worries over recapitalizations of regional Italian lenders bled over into a second week.

European blue chips eased 0.2%, while Germany's DAX was little changed.

Asian markets were lower overall after some early gains that largely shrugged off another missile launch by North Korea, the broad MSCI index of Asia-Pacific shares outside Japa dipping 0.2%.

Japan's Nikkei edged up 0.2% while Australian shares fell as much as 0.8%, hit by another round of falls in the prices of oil and other commodities. China's markets are also closed on Monday and Tuesday for a holiday.

South Korea's KOSPI added 0.4% to touch a record high.

(With inputs from Reuters)