Comments on market by Mr. Amar Ambani, Head of Research – India Infoline Limited (IIFL) – 27th May, 2013

iifl27th May, 2013 : Monsoons, RIL propel Nifty near 6100 levels

The Indian equity market extended gains for the second consecutive trading session on the trot on news that the monsoon is likely to touch the Arabian coast in the next three days. The technical pullback resulted in the Nifty almost touching the 6,100 mark. The Sensex too managed to close above the 20,000 mark.

The rally was fuelled by oil and gas, metals, telecom and power stocks. So, broadbased was today’s rally that there was not a single BSE sectoral index which ended in the red. Even mid- and small-cap stocks participated in the rally with both indices adding 1.1% and 0.9%, respectively.

However, towards the end, the market witnessed some profit-booking and ended marginally off the day’s high.

The Sensex closed at 20,030, up 326 points, while the Nifty closed at 6,083 up 99 points.

The indices fared well despite limited cues from international equity markets. The market in UK or FTSE is shut on account of Spring Bank holiday while US markets will be closed on account of Memorial Day.

Commenting on today’s broadbased rally, Amar Ambani, Head of Research at IIFL, said the Nifty displayed strong resilience by sustaining above 5,940 levels. “A formation of a Hammer pattern on the daily candlestick chart suggests a trend reversal. A move past 6,120 will reinforce the positive trend. For the short-term, 5,940 continues to be immediate support as it is the same level from which the market broke out towards the end of April.”

Finally, BSE Sensex closed at 20030, up 326 points over the previous close. It had earlier touched a day’s high of 20083 and a day’s low of 19,678. It opened at 19750.

The NSE Nifty closed at 6,083 up 99 points over the previous close. It earlier touched a day’s high of 6,099 and a day’s low of 5,975. It opened at 5,989.

Reliance Industries, TCS, Wipro, Infosys, Sun Pharma, Tata Motors, Bajaj Auto, HDFC, BHEL, NTPC, Hero MotoCorp, Coal India, ITC, ONGC, Hindalco and Jindal Steel were among gainers in Sensex and Nifty.

M&M, Maruti and Cipla were among losers in Sensex and Nifty

The advance-decline ratio was in favour of the bulls. On the BSE, 1364 stocks advanced against 981 declining stocks, while 140 stocks remained unchanged.

The INDIA VIX slips 3.8% to close at 17.03. It hit a day’s high of 18.04 and low of 16.68.

Stocks which hit a 52-week high during the week were HDFC, Procter & Gamble, Britannia, Finolex Inds and Orient Abr. While Prism Cement, Novartis India, Indokem, Lakshmi Elect and Wendt India hit a 52-week low during the week.

Sun Pharma touched a 52 week high ahead of its March quarter results to be revealed on Tuesday. Stock closed 4.5% higher and closed at Rs1012.

Reliance Industries Ltd (RIL) surged higher by 5% after the company announced a huge discovery of gas at its KG-D6 eastern off-shore field. The stock closed at Rs826.

Britannia Industries Ltd was up a whopping 16.5% on the National Stock Exchange on Monday, after the confectionary and bakery products maker posted 65.6% rise in net profit at Rs0.87bn for the fourth quarter ended March 31.

India Cements was down 2.3% after the G. Meiyappan, son-in-law of the Managing Director of India Cements N. Srinivasan who is also the BCCI Chief , was arrested by Mumbai Police for his alleged role in IPL spot fixing scandal.

The company earlier in a statement clarified that Meiyappan is neither the owner nor CEO/team principal of Chennai Super King (CSK). Gurunath was only one of members (Honorary) of CSK management. The company also said that if anyone is proved guilty, strict action will be taken. The company has assured full co-operation with BCCI & Law Enforcement authorities