Sensex spurts 266 points, Nifty regains 10,750; bank, auto stocks lead rally
Jayant Manglik, President, Religare Broking
Despite negative global cues, the Indian equity benchmark indices showed firmness in Wednesday’s session, led by better than expected macro data and cabinet’s approval to raise MSP for kharif crops. Throughout the day, markets remained volatile and the Nifty index swung both ways touching intra-day low of 10,678 in the first half, however it bounced back smartly to touch intra-day high of 10,777 before closing the session 0.7% higher at 10,770 levels. The broader market indices, BSE Midcap & Smallcap, underperformed the benchmark. The sectoral indices exhibited a mixed trend, wherein Auto, Banks and Healthcare were the top gainers up by 0.7-1.3%, while Power, IT and Consumer Durables were laggards.
We expect the Indian equities to remain range bound in the coming sessions. Domestic macro data and movement of currency & crude oil will dictate the further course of the market in the near term. Market participants would also closely monitor the trade tension between US & China. Under uncertain domestic and global environment, steady reform implementation and revival in the corporate earnings is essential for the markets. We advise traders to trade cautiously whereas investors can continue to accumulate fundamentally sound companies.
Sensex at close
The BSE 30-share Sensex started on a positive note at 35,385.52 and advanced to the day's high of 35,667.31 before ending at 35,645.40, up 266.80 points, or 0.75 per cent. However, the gauge touched the day's low of 35,309.67. It had gained 114.19 points in the previous session.
Markets At Close
The Sensex today spurted by 266.80 points to close at 35,645.40, led by gains mainly in auto, bank and energy stocks despite weak global cues amid concerns related to trade war and macro conditions. Both key indices Sensex and Nifty posted gains for the second straight session, with consistent buying by domestic institutional investors and encouraging services PMI data for June lifting trading sentiment.
Shriram Transport share price plunged a whopping 18 per cent on Wednesday after global brokerage Credit Suisse downgraded the stock to 'neutral' from 'outperform'. Stock of the transport finance firm shed as much as 17.89 per cent to Rs 1066.10 on the BSE. Shriram Transport stock is down over 25 per cent so far in 2018, and added just 6 per cent in the last one year. By comparison Sensex rallied 13 per cent during the same period. According to a report on Bloomberg, Credit Suisse analyst Sunil Tirumalai downgraded Shriram Transport to 'neutral' from 'outperform'. The rating agency lowered its target price on the stock to Rs 1,400 from Rs 1,900.
Fortis Healthcare: Malaysia's IHH Healthcare and Manipal-TPG combine have put in fresh binding bids for cash-strapped healthcare chain while Munjal-Burman combine, which had earlier emerged as the preferred suitor for Fortis Healthcare, has backed out from the race.
Asian stocks were on shaky ground on Wednesday while the Chinese yuan stood near 11-month lows as the spectre of a Sino-U.S. trade war haunted investors ahead of an end-of-week deadline for U.S. tariffs on billions of dollars worth of Chinese imports. MSCI`s broadest index of Asia-Pacific shares outside Japan edged up 0.1 percent in early trade, a day after it hit a nine-month low. Japan`s Nikkei lost 0.5 percent. Wall Street dropped on Tuesday, giving up early gains in a truncated session ahead of the Independence Day holiday on Wednesday, while technology shares came under pressure just a day after their solid start for the quarter on Monday.
Wall Street dipped on Tuesday, weighed down by Apple, Facebook and other technology stocks, in a trading session ending early ahead of the U.S. July 4 holiday. Facebook dropped 2.35 percent after the Washington Post reported a federal probe on the data breach linked to Cambridge Analytica was broadened and will include more government agencies.
The dip in the social media company`s stock, along with a 1.7 percent slide in Apple, weighed on the S&P technology sector, which fell 1.37 percent.
Target: Rs 950
Stoploss: Rs 900
- The company's results due on July 5; profit expected to double
- 40% cash delivery in the stock
The Sensex and Nifty ended higher on Tuesday, recovering from earlier losses, as gains in energy stocks helped offset lingering trade tensions in Asia ahead of the deadline for imposition of tariffs by the US on China. The rupee recovering from record lows against the US dollar also bolstered sentiment.
The Sensex ended at 35,378, down 114.19 points, while the broader Nifty slipped 42.60 points to 10,699. The 50-share index had tested 10,700 in intraday trade. In the broader market, the BSE Midcap and the BSE Smallcap indices gained 0.7 per cent and 0.4 per cent, respectively.
"Appreciation in rupee over dollar and a positive rebound in global market provided some stability in domestic market. Pharma and IT stocks outperformed owing to the advantage of favorable exchange rate and improving outlook. However, global trade tensions may influence investors to retain a cautious approach to the market in the near term," said Vinod Nair, Head of Research, Geojit Financial Services.