Nifty, Sensex Off Day's Highs As ICICI Bank, ITC Fall: Midday Market Update

India's benchmark stock indices pared some of the morning gains by midday Thursday, led by declines in ICICI Bank Ltd. and ITC Ltd.

At 12:19 p.m., the NSE Nifty 50 was trading 86.90 points or 0.35% higher at 25,005.35, and the BSE Sensex rose 178.48 points or 0.22% to 81,701.64. The Nifty 50 rose 0.62% to touch an intraday high of 25,072.55, and the Sensex rose 0.57% to the day's high of 81,986.86.

Market participants in the country are anticipating the release of India's CPI figure after market hours on Thursday. In August, inflation is largely expected to be unchanged at a 59-month low of 3.54% from July, according to an Informist poll.

Kotak Securities believes the current market structure is weak and selling pressure will intensify if the indices (Nifty and Sensex) slip below 24,750/80,900. Below 24,750/80,900, the Nifty can fall to 24,500 or 24,400 levels, said Shrikant Chouhan, head of equity research at Kotak Securities. "On the other side, 25,150/82,200 will be the key resistance levels for the bulls. Above that, it can bounce back to 25,250-25,300/82,500-82,700. However, the real strength would emerge only above the level of 25,350; till then, it is advisable to reduce long positions," he said. 

Asian share indices rose tracking overnight gains on Wall Street after the US consumer price index for August came in line with market expectation, which sealed the view that the Federal Reserve will go for a 25 basis-point rate cut in its two-day policy meeting on Sept 17-18. However, debate over the path of rate cuts after September remains on concerns that the Fed might have taken a long time to cut rates.

Data from the US Bureau of Labour Statistics showed inflation in the world's largest economy grew 2.5% on the year in August, from 2.9% in July. The figure is in line with Bloomberg Survey's forecast.

Meanwhile, crude oil prices rose above $71 a barrel on Wednesday due to supply-side worries as Hurricane Francine made a landfall on Louisiana. This weighed on the sentiment of emerging market equities as most of these countries import substantial amounts of crude oil.

So far today, the November future contract of Brent Crude on the Intercontinental Exchange rose 1.44% to $71.63 a barrel.

HDFC Bank Ltd., Bharti Airtel Ltd., Kotak Mahindra Bank Ltd., Bajaj Auto Ltd., and Mahindra & Mahindra Ltd. were contributing to the Nifty 50.

ICICI Bank Ltd., ITC Ltd., Tata Consultancy Services Ltd., Tata Motors Ltd., and Nestle India Ltd. were weighing on the index.

On NSE, all 12 sectors were trading higher with the NSE Nifty Auto leading the gains.

Broader markets outperformed benchmark indices. The BSE Midcap and Smallcap indices were trading 0.75% and 0.42% higher, respectively.

On BSE, all 20 sectors rose with the BSE Consumer Durable emerging the best performing sector.

Market breadth was skewed in favour of buyers. Around 2,216 stocks rose, 1,605 stocks declined, and 162 stocks remained unchanged on BSE.