Bears take a breather; Nifty reclaims 8,100 led by bluechips

Markets broke 7-day losing streak as investors accelerate buying at attractive valuations amid firm Asian cues

Markets bounced back after seven straight day of losses on value buying and short covering in blue chip stocks led by index heavyweight Reliance Industries.

Further, market sentiment improved after MSCI deferred inclusion of China A stocks to its benchmark indices which had triggered the continuous outflow of funds by the foreign investors.

S&P BSE Sensex ended at 26,840.50 up by 359.25 points or 1.36% while the CNX Nifty was able to reclaim its crucial level of 8,100. The 50-share Nifty ended at 8,124.45 up by 102.05 points or 1.27%.

The broader markets ended firm in tandem with the larger peers, the BSE Mid-cap and Small-cap indices ended up 1.1% each. Market breadth was strong with 1,697 gainers and 951 losers on the BSE.

In the currency front, the rupee is quoting at 63.82 against the US dollar on the back of fresh selling of dollars by banks and exporters following a strong rebounded in the equity market.

EXPERT VIEW

According to Ranak Merchant, Technical Analyst - Strategies of Sushil Financial Services, “Markets were left high and dry last week, as the ‘Monsoon Effect’ played havoc on trader sentiment. Down by over 3.50% on the benchmark, but not out as the current week re-emerged from a lost ground, gaining strength at the psychological support of 8,000, thereby forming a ‘Monthly Double Bottom’. With most events, both national and international, now behind us market movement would take cues from the progress of monsoons.”

Further she adds, “Traders watch the zone of 8,000-8,050 as support while 8,182-8,205 would offer resistance. The level of 8,182 being a retracement resistance and 8,205 is Nifty’s 200 Day EMA. The next few sessions are likely to be confined in the said range, and only a sustained breakout above 8,205 would enable a move towards 8,470.”  

GLOBAL MARKETS

German bond yields hit 1% for the first time since September on Wednesday as long-term inflation expectations rose, although recent rollercoaster moves in fixed-income markets kept stock markets flat.

The ongoing Greek debt drama was also in focus, with a planned meeting between leaders of Germany, France and Greece on Wednesday in doubt after European Union officials said Athens' reform proposals to unlock new funding to ward off a debt default fell well short.

The FTSEurofirst 300 was trading flat, underperforming a 0.4% rise both for MSCI's broadest index of Asia-Pacific shares outside Japan and for global equities overall.

SECTORS & STOCKS

BSE IT, Auto and Capital Goods indices surged by 2% each. Infact, all the major BSE sectoral indices ended in positive zone.

From the IT space, Wipro rose by over 3% on news that the software major is looking at acquiring Equiniti, UK-based back-office services provider. TCS and Infosys gained by almost 2%.

TCS launched TCS BaNCS Digital, a solution designed specifically for financial institutions in North America which will be used by the US based banks to deliver an intuitive, interactive and insightful customer experience.

Among auto shares, Bajaj Auto, M&M, Tata Motors and Maruti Suzuki accelerated between 1-3%.

Shares of car companies including Tata Motors, Maruti Suzuki and M&M surged after Society of Indian Automobile Manufactures (SIAM) reported a jump in the domestic passenger car sales segment. CLICK HERE FOR FULL REPORT

Financial shares gained momentum after the RBI allowed banks to take control of debt-laden companies by converting loans into equity. SBI, HDFC, Axis Bank and ICICI Bank gained between 1-2%.

Capital Goods majors like L&T and BHEL increased between 2-4% ahead of April IIP numbers which is scheduled to be announced on Friday.

Index heavyweight Reliance Industries gained over 2% on the BSE ahead of the annual general meeting on June 12 where Mukesh Ambani will meet its shareholders and make announcements for future growth of the company.

Bharti Airtel was up around 2% on reports that the telecom major has raised 2G and 3G rates for its pre-paid customers by 13-18%.

Among other shares, Sun Pharma Advanced Reseasrch Company (SPARC) gained 3% after the company licensed out Xelpros (Latanoprost BAK-free eye drops) to a subsidiary of Sun Pharma for the US market. Meanwhile, Sun Pharma climbed 1% higher.

SUGAR & FERTILISER STOCKS RALLY

Shares of sugar companies ended on a strong note after the Cabinet Committee on Economic Affairs (CCEA) approved to provide an interest-free loan worth Rs 6,000 crore to the sugar companies.

Some of the notable sugar companies include Sakhti Sugars, Bajaj Hindustan, Balrampur Chini Mills, Shree Renuka Sugars, Upper Ganges Sugar and Industries, Dhampur Sugar Mills and Oudh Sugar Mills ended higher between 6-20% on the BSE.

CCEA gave a nod to the continuation of urea production from three plants Madras Fertilizers (MFL), Mangalore Chemicals and Fertilizers (MCFL and Southern Petrochemical Industries Corporation (SPIC) that use naphtha as feedstock till availability of gas through pipelines or any other means.

In the fertilizer space, Rashtriya Chemicals and Fertilizers, National Fertilizers and Gujarat State Fertilizers and Chemicals (GSFC), Chambal Fertilisers and Chemicals, Khaitan Chemicals ended higher between 1-10% on the BSE.