Lull after the storm; Sensex, Nifty end flat

iifl24th September, 2013 : Comments by Amar Ambani, Head of Research, India Infoline

After sharp falls in the past two trading sessions, the Indian indices ended on a flat note on Tuesday. For a brief while the NSE Nifty surged past the 5930 levels. However, the gains were short-lived as selling pressure was witnessed at higher levels. From there on, benchmark indices were stuck in a narrow trading range throughout the day with the NSE Nifty hovering around the 200 day moving average of 5900.

The capital goods, auto, power, consumer durables, healthcare and FMCG were among the top gainers. On the other hand, metals, PSU, telecom and oil and gas stocks were among the top laggards.

The banking stocks, which were at the receiving end since the repo rate hike on Friday settled down in a tight zone. Commenting on the same, Amar Ambani, Head of Research at IIFL said, “Private Banks are well-capitalized to absorb shocks from external environment. Banks with robust or improving retail banking franchise are unlikely to see a significant deterioration in RoA delivery over FY13-15. Recent steep price correction has also made valuation reasonable vis-à-vis perceived risks for banks such as HDFC Bank, IndusInd and Axis.”  

Finally, BSE Sensex closed at 19920 up 19 points, while NSE Nifty closed at 5,892 up 3 points over the previous close.

Bajaj Auto, Tata Power, NTPC, LT, Cipla, M&M, BHEL, HDFC, NMDC, Tata Motors, GAIL and Maruti were among the major gainers in the Nifty.

On the other hand, Hindalco, BPCL, Coal India, Jindal Steel, ACC, HCL Tech, Bharti Airtel, Bank of Baroda and IDFC were among the major laggards.

The advance-decline ratio was marginally in favour of the bears. On the BSE, 1168 stocks declined against 1148 advancing stocks, while 152 remained unchanged.

The INDIA VIX was down 1.1% at 26.72. It hit a day’s high of 28.49 and low of 26.27.

Shares of Kingfisher Airlines shot up by 10% to close at Rs5 after reports stated that it was in talks with a foreign investor for a potential stake sale.

SBI was down 0.7% after rating agency Moody’s Investors Service downgraded public sector bank’s senior unsecured debt and local currency deposit ratings to ‘Baa3’.

Shares of ONGC edged lower by 0.5% to close at Rs274. ONGC Videsh Ltd and its partners are mulling raising stake in Venezuela’s US$20bn Carabobo-I oil project even as India looks at raising crude oil imports from the Latin American country.

Shares of Glenmark Pharmaceuticals were up 1.5% after receiving final approval from the US health regulator for its generic Desoximetasone Ointment.