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Friday, August 30, 2013

Nifty rolls smoothly...above 5400

The Indian equity market ended with strong gains on Thursday amid F&O expiry. Overnight gains in the US and the Asian markets propped up the benchmark indices to open with a positive gap. From there on the benchmark indices just continued rallying on account of short covering across the markets.

Sector-wise, major short covering was witnessed in the realty and infra stocks as the Congress was now eyeing for the contentious Land Acquisition, Rehabilitation and Resettlement Bill. Parliament is likely to take the Land Bill for discussion. The Land Acquisition Bill seeks to provide a fair compensation and rehabilitation to land owners in both rural and urban areas for land that is acquired for developmental projects.

Among the other major gainers were, oil and gas, metals, FMCG, capital goods and the auto stocks. Even the mid-cap and the small-cap stocks witnessed some buying momentum.

On the currency front, the slide in the rupee came to a halt after the RBI decided to open a foreign exchange swap window to meet the daily dollar requirements of the three public sector oil marketing companies which guzzle US$8-8.5bn every month, for the import of an average of 7.5 mn tonnes of crude oil.

The telecom sector also was in action on Thursday, commenting on the sector, Amar Ambani, Head of Research at IIFL, said, telecom operators posted robust rev/min improvement in Q1 FY14 and he expect companies to continue to benefit from sustained effort to reduce promotional/discounted minutes over past few quarters. Although uncertainty still persists around issues like one time spectrum charge, renewal fees etc, he believes current valuations factor in potential payouts from the same. We believe that worst may be over from stock perspective and recommend BUY on Idea and Bharti.

Finally, Sensex closed at 18401 up 404 points, while Nifty closed at 5,409 up 124 points over the previous close.

Sesa Goa, Hindalco, HDFC, Lupin, Kotak Bank, Bharti Airtel, Dr Reddy’s Labs, HCL Tech and NMDC were among the top gainers in the Nifty, while, PNB, Ultratech Cem, Coal India, Infy, SBI and Ranbaxy were among the top losers.

The advance-decline ratio favoured the bulls. On the BSE, 1274 stocks advanced against 990 declining stocks, while 138 remained unchanged.

The INDIA VIX was down 9% at 29.41. It hit a day’s high of 32.44 and low of 28.83.