You can never appreciate the shade of a tree unless you sweat in the sun.
Looks like the ongoing consolidation in the domestic market and erratic global cues are making the bulls sweat for every penny. Making money in a largely lackluster market seems to have become a little tough. Also, the fact that we have had such a huge rally since March 2009 will always act as a deterrent. After touching two-year highs recently, the key indices have been drifting in a narrow range.
Global markets have been a bit volatile of late although the US indices are trading near or above 18-month highs. Headline risk still prevails due to lingering concerns over sovereign debt issues in Europe. Anemic recovery in the US and China’s tightening are among the other notable pressure points.
Back home the main worries are tied to inflation and its fallout on monetary policy. In the immediate future, monsoon will play some sentimental role in driving the sentiment. Today we expect a flat to slightly higher start. Thursday was a day of large caps as fund flows improved. In a time of uncertainty one should stick with the best and the brightest while dumping the laggards.
Technically, the NSE Nifty has support at 5200 and resistance at 5300. It can rise to 5400 provided FII inflows are strong and global markets are supportive. At the same time, there is always a chance of a small correction, but no need to panic. Bulls are still lacking in conviction so we continue to advise caution. Wait till the market breaks out of its current range and the global scenario changes for the better.
Results Today: 3i Infotech, Areva T&D, Binani Cement, Corporation Bank, GSK Consumer, Mahindra Lifespaces, Merck, MMTC, Pantaloon Retail, Persistent Systems, P&G, Reliance Industries, SKF India and Wipro.
FIIs were net buyers of Rs5.18bn on Thursday on a provisional basis. Local funds were net buyers of Rs1.82bn, according to figures published on the NSE's web site. In the F&O segment, the foreign funds were net buyers of Rs8.58bn. On Wednesday, FIIs were net buyers of Rs2.65bn in the cash segment, as per the SEBI web site.
All was well with the market till a late bout of selling played spoilsport and cut short the party for the bulls today. "The U-Turn on the Indian bourses in the last hour of trades could be attributed to a similar swing in European markets. Stocks in Europe turned lower after EU statistics agency revised up Greek’s fiscal deficit and warned of more upward revision", says Amar Ambani Vice President Research IIFL.
The benchmark Indian indices, which were cruising along nicely till the mid-afternoon erased more than half of the gains in the wake of the selling in European markets.
The slide was led by heavy selling in index pivotals like Tata Steel, ICICI Bank and Bharti Airtel. Moreover, the mid-cap and the small-cap counters, which were in demand for the past couple of days, saw some profit taking today.
The BSE Sensex gained 101 points to end at 17,574 and NSE Nifty gained 24 points to close at 5,269. Among the 30 components of Sensex, 20 ended in the positive terrain and 10 were in the red.
Among the BSE sectoral indices, the BSE Oil & Gas index was top gainer, the index gained 1.2%, followed by BSE Auto index up 1% and Banking index up 0.8%. However, the Mid-Cap and the Small-cap index ended flat.
Outside the frontline indices, the big gainers in the broader market were RCF, UCO Bank, Chambal Fert and EIH. On the other hand, losers included IRB Infra, Madras Cem, Jet Airways and MMTC.
Shares of TCS erased early gains and ended almost flat to end at Rs785. The company yesterday announced a global engineering service partnership with Rolls-Royce. The scrip opened at Rs789 it touched an intra-day high of Rs793 and a low of Rs781 and recorded volumes of over 0.3mn shares on BSE.
Shares of Glenmark also erased early gains and ended almost flat at Rs269. The Pharma major reportedly won a favorable legal verdict in US over a cholesterol drug case with Merck. The scrip opened at Rs272 it touched an intra-day high of Rs276 and a low of Rs268 and recorded volumes of over 0.2mn shares on BSE.
Shares of Shriram EPC surged by over 3% to end at Rs284 after reports stated that the company has filed DRHP of Orient Green Power a subsidiary of the company. The scrip opened at Rs283 it touched an intra-day high of Rs292 and a low of Rs281 and recorded volumes of over 0.18mn shares on BSE.
Shares of Suven Life Science surged by over 5% to end at Rs32.65 after the company announced that it secured 3 Australian patents on NCEs. The scrip opened at Rs32.50 it touched an intra-day high of Rs32.65 and a low of Rs31.25 and recorded volumes of over 0.12mn shares on BSE.
Shares of Zee Entertainment gained 3% to end at Rs311 after reports stated the board of directors of the company approved acquisition of INX media’s general entertainment channel 9X.