Heavyweights lift stock markets after indices tanked; actions move into mid and small caps  

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By S Jha

New Delhi, December 20: Indian stock markets tanked on Tuesday, but the heavyweights came into play in the afternoon to retrieve the indices to bring them for a flat closure. The market turnaround was also helped by the institutional buying into the Indian equities.

Dow Jones was also trading flat to positive in the afternoon session in an indication that the markets are finally coming out of the body blow of the hawkish US Fed commentary on the rate hikes. It may be recalled that the US Fed commentary had arrested the global equity rally, which had been running away with gains after believing that the inflation is finally under the control and the rate hikes wouldn’t be that aggressive in the near future.

The Indian indices, Nifty and Bank Nifty along with Sensex, tanked on Tuesday with a major sell off in the metal, IT and banking space. The metal index was hammered. The IT stocks continued bleeding, with the prospects of the US recessions weighing them down. The banking space also slumped, which was led by the HDFC Bank. At one time only two of the 50 stocks in the Nifty were in the green. Adani Enterprises posted healthy gains.

Within the metal pack, Hindalco and Tata Steel were in deep reds. HCL Technology, Tech Mahindra and Wipro were smashed. But the indices were rescued by the IT heavyweights – TCS and Infosys, which took support from their key technical levels and sharply rebounded. Reliance Industries, another index heavyweight, turned bullish in the late hours. They were joined by the Axis Bank and later by the ICICI bank to bring an all round turnaround on the indices.

Foreign institutional investors (FIIs) bought a net of Rs 456 crores. Their domestic counterparts, who had been buying into the equities during the sell off again had a net buy of Rs 495 crores. The institutional buying was a relief for the investors, boosting their confidence in the equity markets.

But the action has moved into the smallcaps. After a stellar rally in the sugar stocks, other smaller and medium sized companies made gains on Tuesday. Chemplasts, Gravita, Salasar, Salzer Electronics, Inox Wind, Ramco Systems, Goa Carbon, and Talbros Auto were among the scrips which made handsome gains on the bourses. Technical chartists have been maintaining that the Indian stock markets are in sideways mode currently.

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