Stock Market: Indices caught in congestion zone; heavyweights fail to lead

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By S Jha

New Delhi, February 10: Sell on the rise looked to be the theme of the stock market on Friday after the US Federal Reserve commentary on future roadmap left investors puzzled. The street is also without the heavyweights giving leadership to the markets. Yet, action is spreading in the small and midcaps where the companies coming out with better numbers in the quarterly results were lapped by the investors.

Value buying in the beaten down heavyweights such as Reliance Industries, Bajaj financial twins, and IT scrips had stabilized by the indices from falling further. But they all went silent on Friday, with profit boking kicking in them on the last day of the trading for the week.

The stock market is also without any decisive cues. The indices are neither breaking down nor breaking out of the tight range in which they are seen to be stuck for the past few days. The mutual fund houses in their reports on the outcome of the Monetary Policy Committee (MPC) meeting of the Reserve Bank of India have underlined underlying risks going ahead, noting that the commentaries are hawkish in tone on the rate hike roadmap to tame the inflation. The higher interest rates have begun giving telling blows to the small and medium enterprises, with a large number of them shutting down their businesses. With the high interest regime, the investors are seen to be staying cautious of the risk-reward ratio not being favourable to them to further take stake in the volatile market.

Yet, the foreign institutional investors broke off the trend seen since mid-November, as they ended the day with a net buy in the cash market of Rs 1458 crores. The FIIs had been seen to be shorting the Indian equity market, which gained pace in their efforts to buy into China after Xi Jinping, President of the Communist nation, opened the economy by scrapping the ‘Zero Covid Policy’.

Tata Motors was the lone heavyweight which gained more than two per cent following reports of the auto-maker hiking prices of its products. Aurobindo Pharma, Ion Exchange, HG Infra, JBM Auto were among the scrips in the smallcaps which gained strongly on Friday. The metal pack was under stress, with the likes of Hindalco and Tata Steel losing.

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