Sensex conquers Mt 22k, retreats

Capital goods, realty and bank scrips might see some profit booking over next fortnight, expect analysts

Benchmark indices hit record highs for a third straight day on Monday, amid continued foreign institutional buying, though the net gains were marginal.

Though the stock performers of the previous week, including banks, capital goods and real estate, continued their stellar show, analysts warn of some profit sales in these. “We are expecting some technical pull-back  in the market. There could be some profit booking in stocks which had been in  the limelight in the last few sessions,” said Sunil Jain, vice-president (equity research), Nirmal Bang Securities.

The BSE Sensex, which breached the 22,000-level for the first time, closed up 0.2 per cent at 21,934 after touching a record high of 22,023 during the day. The NSE Nifty rose 0.2 per cent to end at 6,537. This is the fifth straight session of gains for both indices.

Foreign institutional investors (FIIs) were net buyers of equities at Rs 1,253 crore, their 18th straight session of buying. Domestic institutional investors (DIIs) were net sellers at Rs 1,044 crore.

“We have seen foreign investors creating huge long positions in the market in the past two weeks. That would continue for some more time,” said Shubham Agrawal, vice-president, Motilal Oswal Securities. “But because the macro economic factors have not been encouraging, we don’t think the Nifty will be able to cross the 6,650-threshold.”

Indian shares on Monday remained volatile on account of the discouraging Chinese trade data. Other Asian markets remained under pressure, as the trade data indicated a slowing in the Chinese economy.

Analysts said market participants had been mopping shares on hopes a Narendra Modi-led Bharatiya Janata Party would lead the next coalition government and announce steps to revive a sagging economy. Expectations were being built around an improvement in the economy, prompting investors to buy into stocks of the capital goods, financial and real estate sectors, they added.

On Monday, the BSE capital goods and realty sector indices were up a little over two per cent, while the BSE Bankex was up 1.9 per cent. FIIs have been creating bullish bets on these stocks in the past two weeks, market watchers said. However, analysts foresee some profit-booking for these stocks on account of their sudden rise in the last fortnight.

This selling by FIIs could be induced by the February inflation and January industrial production data, analysts said. If these numbers, to be released during the week, turn out to be lower than expected, then it could prompt the Reserve Bank of India to take a re-look at interest rates, they said.

Automobile stocks led the gains in the Sensex, with Maruti, Mahindra & Mahindra and Bajaj Auto gaining 3.7, 3.4 and 2.5 per cent, respectively. Capital goods major Larsen & Toubro gained 3.3 per cent, while domestic lenders HDFC Bank and State Bank of India were up 3.2 and 2.6 per cent, respectively.

However, stocks of the technology and health care sector continued to remain subdued. Tata Consultancy Services was the biggest loser among Sensex stocks, declining 3.7 per cent, followed by Tata Motors at 3.2 per cent and Sun Pharma at 2.6 per cent. Technology giant Infosys was down 1.8 per cent, while Wipro fell 1.4 per cent. Dr Reddy;s and Cipla shed 1.4 and 1.2 per cent, respectively.