Oil and gas stocks gained big after the prime minister hinted at bringing natural gas under the GST
The Nifty Midcap 100 and Nifty Smallcap closed higher by 0.47% and 0.96%.
Equities ended in the red for the third straight session on Thursday because of tepid global cues and concerns over stretched valuation. However, public sector stocks bucked the trend. The Sensex declined by 379.14 points (0.73%) to close at 51,324.69 while the Nifty fell 89.95 points (0.59%) to 15,118.95. The benchmark indices slipped 1.6% in the last three sessions.
Banking and finance stocks bore the brunt of heavy selling, with HDFC twins being the top drags on the Sensex for the second day. Bajaj Finance was the top laggard among the Sensex constituents, declining 2.43%, followed by Kotak Bank, M&M, Nestle India, HDFC, HDFC Bank and ICICI Bank. On the other hand, ONGC was the biggest gainer, rallying 8.32%.
All the top five gainers on the Nifty were public sector stocks. Major gainers were ONGC, GAIL, BPCL, IOC and NTPC with gains of 7.63%, 7.1%, 4.69%, 4.1% and 3.93%, respectively. Oil and gas stocks rose after Prime Minister Narendra Modi hinted at bringing natural gas under the GST. This sent stocks like Indraprastha Gas, GAIL and Gujarat Gas higher by 4.5%, 7.11% and 8.47%.
The Nifty PSE index hit its 52-week high rallying by 4.36%. Besides oil and gas stocks, the rally in the PSU bank stocks continued on Thursday — the PSU Bank index closed 5.6% higher.
Experts believe that the key themes going forward this year would be the re-rating in the PSU stocks and midcaps outperforming large cap companies. Gaurav Dua, senior vice president – head capital market strategy, Sharekhan by BNP Paribas, said: “The prevailing scenario represents the two key trends of 2021 – the midcap index outperforming large-cap stocks and the re-rating of public sector companies. Investors need to adjust their portfolios accordingly.”
Heavy selling in private financials and auto stocks brought the markets down. Major losers on the Nifty were Bajaj Finance, M&M, Tata Motors, Kotak Mahindra Bank and HDFC Bank, down by 2.47%, 2.18%, 2.17%, 2%, and 1.97%.
Siddhartha Khemka, head – retail research, Motilal Oswal Financial Services, said: “Going ahead, the market may continue with its consolidation for some time till the concerns over rising inflation recedes. The market would track rising inflation, increasing Covid cases along with prospective US stimulus in the near term for further direction.”