Nifty conquers 5,900

iifl11th September, 2013 : Comments by Amar Ambani, Head of Research, India Infoline (a well diversified financial services company)

Amar Ambani, Head of Research, at IIFL said “Continued appreciation of the currency and softening of the 10-year G-Sec yield further strengthened the positive sentiment for the banking sector. PSU banks trading near historic low valuations bounced back sharply; but this rally is likely to fizzle out soon as fundamentals remain extremely weak.”

Nifty recovered from intra-day low in late afternoon trades to close above 5900 mark for the first time since late July 2013. Recent appreciation in Rupee aided the recovery in the market. Also, strong gains were seen in banking and metal stocks.

Nifty was highly volatile after the recent run up of ~600 points in just four trading sessions. In the near term, market movement is likely to be choppy as there are slew of important economic data, which are scheduled to be released. Industrial Production for July and CPI for Combined, Rural, and Urban for August will be released on September 12. While, August trade data and rail freight traffic data are among the other data to be announced.

Among the heayweights, Tata Steel, Hindalco, SBI, Tata Power, Sun Pharma and Maruti Suzuki were among the major gainers, while Tata Motors, HUL, ITC and BHEL were the losers .

Over 1,422 shares advanced, while 937 stocks declined and 152 scrips remained unchanged. The BSE Small-Cap index closed 73 points up at 5,599, whereas BSE Mid-Cap index ended 59 up points at 5,462.

Strength was seen in metal, realty, banking, capital goods and pharma stocks, while sectors such as FMCG, consumer durables, IT, oil & gas and teck lost some sheen.

Finally, BSE Sensex closed at 19,997, while NSE Nifty closed at 5,913 up 16 points over the previous close.

The India VIX, the key gauge of market volatility, was up 1.05% up at 29.75