Sharp recovery: Sensex, Nifty erase day’s losses

iifl7th October, 2013 : Comments by Amar Ambani, Head of Research, India Infoline

The Indian equity market ended flat on Monday with the NSE Nifty managing to sustain above the 5900 mark once again. After opening with a negative bias and slipping sharply, markets took a sharp turn and bounced back taking support at its 200 DMA.

Buying momentum in the pharma, metal and telecom stocks lifted the market to close near day’s high. Even the mid-cap and the small-cap stocks were marginally in demand. Among the major laggards were, the banking, capital goods and realty stocks.

The BSE IT index was in momentum and was the top gainer among the BSE sectoral indices. Commenting on the same, Amar Ambani, Head of Research at IIFL said, “The improving IT spending in the key geographies like the US and verticals like BFSI is resulting in higher revenue traction for Indian IT players. Management commentary too has shown noticeable improvement with expanding deal pipeline and better project ramp-ups.We expect Q2 FY14 to be a strong revenue growth quarter for both Tier 1 and mid-cap players.”

BSE Sensex closed at 19895 down 21 point, while Nifty closed at flat at 5,906 over the previous close.

Coal India, Bharti Airtel, Axis Bank, ICICI Bank, Maruti, Grasim, LT, SBI and NMDC were among the major laggards. On the other hand, Ranbaxy, Tata Steel, BPCL, TCS, Hindalco and IDFC were among the top gainers in the Nifty.

The advance-decline ratio was marginally in favour of the bulls. On the BSE, 1279 stocks advanced against 1090 declining stocks, while 153 remained unchanged.

The INDIA VIX was up 2.7% at 26.83. It hit a day’s high of 27.93 and low of 26.13.