Brokers react as Sensex ends above 79k, Nifty 50 surpasses 24,000 for the first time, in Kolkata on Thursday. (ANI Photo)
| Photo Credit: ANI

Benchmark indices Sensex and Nifty hit intra-day record high levels before closing almost flat on July 29 due to profit-taking in FMCG and IT shares by cautious investors ahead of the key U.S. Fed interest rate decision later this week.

The 30-share BSE Sensex closed higher by 23.12 points or 0.03% at 81,355.84, its all-time closing high, with 16 of its components advancing and 14 ending lower.

The index opened higher and jumped 575.71 points or 0.70% to hit a new intra-day record peak of 81,908.43 in late-morning deals following a decline in U.S. bond yields. However, investors preferred to book profits at record high levels amid high volatility dragging the index lower to close flat.

The NSE Nifty ended marginally up 1.25 points or 0.01% at an all-time closing high of 24,836.10. During the day, it surged 164.9 points or 0.66% to hit a fresh lifetime peak of 24,999.75.

Gainers and losers

From the Sensex pack, Larsen & Toubro rose the most by 2.77% after it announced bagging new large orders worth ₹2,500 crore to ₹5,000 crore.

UltraTech Cement, which announced the acquisition of 32.72% stake in India Cements from promoters and their associates for ₹3,954 crore, closed up 1.42%. India Cements closed lower by 0.65%.

Bajaj Finserv, Mahindra & Mahindra, State Bank of India, IndusInd Bank, Reliance Industries and Sun Pharma were among the biggest gainers.

On the other hand, Titan Ltd fell the most 2.38%. Bharti Airtel (2.22%), ITC (1.33%), Kotak Mahindra Bank (1.04%) and HDFC Bank (0.68%) were among the major losers, dragging the key indices from record highs. IT shares Tech Mahindra, TCS, Infosys, and HCL Tech fell up to 1% ahead of the U.S. Fed meeting on interest rates.

“Nifty ended almost flat after a volatile session. Asian stocks started the week with gains ahead of central bank policy meetings in the US, the UK and Japan,” said Deepak Jasani, Head of Retail Research, HDFC Securities.

BSE smallcap index hits all-time high

In the broader market, the BSE smallcap gauge jumped 1.17% and the midcap index climbed 0.80%. The BSE smallcap index hit its all-time high level during the day.

Among the indices, capital goods surged 2.73%, industrials rallied 2.33%, realty (1.51%), oil & gas (1.17 per cent), energy (0.96%) and power (0.76%). IT, telecommunication, utilities and teck were the laggards.

Mixed global cues

“An ease in the U.S. personal consumption expenditure to 2.5% and the subsequent drop in the US 10-year yield have fuelled optimism that the Fed might cut rates in September, leading to a global rally. However, profit-booking was triggered in the domestic market given trading in the overbought territory and closed flat,” said Vinod Nair, Head of Research, Geojit Financial Services.

Mixed global cues and the underperformance of major banks are causing an intermediate pause in the index, Ajit Mishra – SVP, Research, Religare Broking Ltd said.

In Asian markets, Seoul, Tokyo, Shanghai and Hong settled in the positive territory. European markets were trading on a mixed note. The US markets rallied on July 26.

Foreign Institutional Investors (FIIs) bought equities worth ₹2,546.38 crore on Friday, according to exchange data. Global oil benchmark Brent crude declined 0.31% to $80.88 a barrel.

FMCG major Nestle India has “strong commitments” for local manufacturing with plans to invest ₹4,200 crore by 2025, including in its 10th plant in the country at Odisha, its Chairman and Managing Director Suresh Narayanan said on Friday.

Nestle India, the maker of popular Maggi noodles, KitKat chocolate and Nescafe, is investing to create capacity as it sees “fairly robust” demand in coming years in the Indian market.

“The investments done are fairly significant… till the first half of 2023, about ₹2,100 crore already been invested on capital investments,” said Mr. Narayanan in a media roundtable here.

These investments are for augmentation of manufacturing capacity, he said adding a third of that has gone into food space, another one-third on chocolate and confectionary and the rest on nutrition and others.

“Another ₹4,200 crore is being spent between 2023 and 2025. This includes around ₹900 crore for a new factory in Odisha,” he said.

Last year in September, Mark Schneider, the CEO of Nestle SA, global food & beverage conglomerate and its parent firm, announced to invest ₹5,000 crore by 2025.

Since its inception, Nestle India has invested around ₹7,000 crore in the last 60 years here, said Mr. Narayanan.

“This is the indication of where the promise for India stands and where the performance of the company is taking us,” he said adding new manufacturing practices and technology and digital infra are coming as a bundle.

A good part of this support is coming from the Swiss parent firm Nestle SA, which is providing technology, process and management capabilities for the new system.

Detailing about the investments, Mr. Narayanan said: “There will be probably two or three areas where it will go. One of course is for the new factory in Odisha, then there is further expansion of facilities further expansion of facilities in a coffee and beverages business that is also planned,” he said.

Nestle will have phases III & IV of expansion at the Sanand (Gujarat) plant where it will be setting up confectionery lines besides noodles.

“Then there is an expansion plan for our Moga (Punjab) and also in our other factories such as at Ponda (Goa) for the chocolate factory,” Mr. Narayanan said.

Over the Orissa factory, Mr. Narayanan said at this stage it would be a noodles factory but would also consider manufacturing chocolates and confectionery products there later stage.

“It’s a fairly large kind of unit which we will be building there,” he said adding “One of the targets for the company was to open something on the east side.” Over the timeline, Mr. Narayanan said typically it takes around two years to get one factory completed.

Nestle India is also working towards adding more female employees as per its commitment to diversity and inclusion. Now women represent one-fifth of its field force, and over 50% of its board strength, said Mr. Narayanan.

“As a company, we have close to 25% of women in our in our workforce again it’s something that I am very proud of,” he said adding at Sanand, its latest factory, more than 50% of the workforce are women.

Similarly, the coming plant at Orissa will also be a “citadel of diversity” with more than 50% women operators.

Nestle India presently operates nine factories employing roughly 6,000 people here. India is among the top ten global markets of Nestle SA, a Swiss multinational food and beverages conglomerate.