Sensex, Nifty Off Day's Highs; Pharma Stocks Jump

Analysts say gains were limited as high inflation dashed hopes of further monetary easing in the near term.

Sensex, Nifty Off Day's Highs; Pharma Stocks Jump


  • Selling pressure in auto, select financial shares weighed on markets
  • Sensex rose 230 points to 38,541 in morning, Nifty touched 11,361
  • Consumer inflation worsened in July, dashing RBI rate cut hopes

Domestic stock markets gave half of early gains on Friday amid cautious trade in Asian shares amid increasing COVID-19 infections. The S&P BSE Sensex index rose as much as 0.60 per cent - or 230.08 points - to 38,540.57 in morning deals, and the broader NSE Nifty 50 benchmark climbed to as high as 11,361.40, up 0.47 per cent - or 60.95 points - from its previous close. Gains in IT and pharmaceutical shares supported the markets however losses in automobile and select financial stocks limited the upside.

At 10:59 am, the Sensex traded 94.98 points - or 0.25 per cent - higher at 38,405.47, while the Nifty was up 29.75 points - or 0.26 per cent - at 11,330.20. (Track Sensex, Nifty Here

The Nifty Pharma index - comprising stocks of 10 major drug makers - climbed up as much as 2.81 per cent, led by Lupin. 

Official data on Thursday showed consumer inflation - or the rate of increase in retail prices - worsened to 6.93 per cent in July from 6.23 per cent in the previous month, remaining above the RBI's medium-term target for a 10th straight month.

Fearing a sharp rise in inflation, the Reserve Bank of India last week kept key interest rates on hold, after reducing the repo rate by a total of 115 basis points since February. The central bank RBI has set its medium term inflation target at 4 per cent.

Shares elsewhere in Asia recovered early losses on Friday following weak Chinese economic data, as concerns about a delay in US fiscal stimulus discouraged some investors from taking on risk.

MSCI's broadest index of Asia-Pacific shares outside Japan was last seen trading 0.02 per cent lower, although Japan's Nikkei 225 benchmark was up 0.07 per cent, and China's Shanghai Composite benchmark up 0.37 per cent. In China, a slower-than-expected rise in industrial production and a surprise fall in retail sales weighed on investor sentiment.

While Hong Kong's Hang Seng gauge traded 0.01 per cent higher at the time, South Korea's KOSPI barometer was down 1.28 per cent. South Korean authorities reported the largest number of new coronavirus cases since March.

The E-Mini S&P 500 futures were up 0.20 per cent, indicating a positive start for Wall Street on Friday, a day after the S&P 500 benchmark index ended slightly lower after briefly trading above its record closing high level for a second day amid doubts about US stimulus measures.