On a roll…Nifty re-conquers 5900

iifl11th July, 2013 : Comments by Amar Ambani, Head of Research, India Infoline 


It was a solid day of trade today as the Sensex closed above 19,650 while the Nifty ended above 5,900 mark. No change in the Federal Reserve’s bond-buying program, which has kept long-term interest rates low and encouraged more borrowing and spending, prompted this rally. Chairman Ben Bernanke reserved his comments for July 17-19 when he will address the House of Representatives Financial Services Committee and Senate Banking Committee. Meanwhile, the minutes from the Fed’s June meeting showed many of the 12 Fed voting officials saying they need to see further improvement in the job market before mulling winding down the stimulus program.


In domestic cues, the rupee strengthened against the dollar in early trade. It appreciated above the 60 per dollar mark but huge dollar demand saw the Indian unit rally below the psychological level.


Today’s market rally was led by metals, banks, realty, capital goods and oil and gas stocks. Even midcap and smallcap stocks saw some buying momentum. Consumer durables bucked the trend, ending in the red.


The IT space was in focus today ahead of Infoys’ Q1 FY14 results. The stock rose 1.2% to close at Rs. 2,535 per share.


Speaking on his expectations for the IT bellwether, Amar Ambani, Head of Research at IIFL, sees Infosys posting a net sales of Rs. 108.55bn, a gain of 3.8% quarter-on-quarter. On the operating profit margin front, Ambani sees a 1.1% QoQ fall to 25.4%. He forecasts a 6.2% QoQ drop in net profit at Rs. 22.46bn. (Also see: Infy Q1 results on Fri: How should you trade the counter?)


The Sensex closed at 19,676, up 382 points, while the Nifty shut shop at 5,935, up 118 points over Wednesday’s close.


The advance-decline ratio favoured the bulls. On the Bombay Stock Exchange, 1,366 stocks advanced against 965 declines, while 148 stocks remained unchanged.


Volatility, as measured by India VIX, plummeted 5.5% at 18.89. It hit a day’s high of 19.98 and low of 18.13.


Stocks in News:


Sesa Goa, Hindalco, Bharti Airtel, Kotak Mahindra Bank, IndusInd Bank, TCS, Coal India, HDFC Bank and Bank of Baroda gained while L&T, Maruti, Ranbaxy and Tata Motors lost out.


Gammon India closed at Rs. 19.25, up 3.7%, on reports that the company is mulling the sale of its 185 acre property in Dombivli.


Bajaj Auto closed flat at Rs. 1,876.1 after the company launched two-wheeler Discover 125T. Meanwhile, talks between the management and workers failed to bear fruit and the 16-day strike at its Chakan plant continues.


Tata Steel added 1.8% and closed at Rs. 261.05 after its Indian operations saw robust volumes growth during the Q1 FY14.


Mangalore Chemicals & Fertilisers closed at Rs. 68, up Rs. 6.15 or almost 10%, on reports that Zuari Agro bought 41.4 lakh shares or an additional 3.5% stake in the company at Rs. 61 per share.