4th July, 2013 : Comments by Amar Ambani, Head of Research, India Infoline
5800 again; Nifty ends above 200 DMA
The Indian equity market ended on a solid note on Thursday. In fact, it closed near the day’s high with the Nifty surging past the 5,800 mark and also its 200 Daily Moving Average.
The markets opened with a positive gap in early trade and managed to maintain its momentum in the first half. However, benchmark indices got a whipping after Reserve Bank Governor D Subbarao said the central bank was not looking to protect any particular level of exchange rate but will iron out volatility.
However, strong European and Asian markets lifted sentiment in the second-half. A sudden bout of buying in IT, FMCG, telecom, realty, oil and gas and auto stocks helped the indices end near the day’s high.
The Sensex closed at 19,410, up 233 points, while the Nifty closed up 66 points at 5,837 over Wednesday’s close.
The banking index was up 0.5%, rebounding smartly from its previous day’s losses. The gainers include Bank of India (2.5%), Yes Bank (1.5%) and IndusInd Bank (1.2%).
From the banking pack, IndusInd Bank finds favour with IIFL’s Amar Ambani. He advises investors to buy the scrip.
Ambani cites diversified and granular credit profile, robust NIM trajectory and resilient asset quality to support his buy rationale. “Near-term performance outlook is very strong with margin expected to expand further.”
The advance-decline ratio favoured the bulls. On the Bombay Stock Exchange, 1,250 stocks advanced against 1,042 declines, while 138 stocks remained unchanged.
Volatility, as measured by India VIX, was down 2% at 18.58. It hit a day’s high of 19 and low of 18.
Stocks in News:
Reliance Infrastructure, HCL Technologies, ITC, Tata Power, BPCL, TCS, Tata Motors, ACC, Hindustan Unilever, Infosys and Bharti Airtel led the gainers pack while BHEL, Tata Steel, Sesa Goa, Cipla, Axis Bank, PowerGrid, Bajaj Auto, Ranbaxy, Maruti and M&M lost out.
Firstsource shot up over 11% to close at Rs. 11.60 per share after big bull Rakesh Jhunjhunwala purchased 5.14% stake in four blocks on the National Stock Exchange.
Sun Pharmaceutical gained 1.2% after the company opted out of the race to buy Sweden’s Meda Pharmaceuticals.
Bharti ended 2.1% higher to close at Rs. 301 after the company subscribed to an additional 2% equity share capital in all the four India BWA entities of Qualcomm.
Suzlon Energy gained 1.1% on Thursday after the company said it plans to raise up to $400mn via the sale of non-critical assets.
Mangalore Chemicals plunged over 10% in early trades but erased its losses to close lower by just a percent. Deepak Fertilisers has acquired 24.46% stake in the company for an undisclosed amount.
Shree Renuka Sugars is expected to start exporting white sugar from its Haldia unit on the east coast. The stock ended lower by 0.6% to close at Rs. 16.65 per share.