8th August, 2013 : Comments by Amar Ambani, Head of Research, India Infoline
After being under constant pressure for almost 10 trading sessions, the Indian equity market finally managed to close in the green with healthy gains. The Nifty closed above 5,550 while the Sensex shut shop above 18,700 levels. The market will remain closed on Friday on account of Ramzan Eid.
Today’s bounce can be attributed to the slight strength witnessed in the rupee against the dollar. Sentiment received a fillip after trade data in China outpaced expectations. Chinese exports rose 5.1% as compared with the same period a year earlier while imports leaped 10.9%.
The rally was led by metals, realty, power and auto stocks. Once again, midcap and the smallcap stocks outperformed the benchmark indices adding 1.3% each. However, oil and gas and healthcare stocks remained under pressure.
The Sensex closed at 18,789, up 124 points, while the Nifty closed at 5,565, up 46 points over Wednesday’s close.
In earnings, State Bank of India will declare its results on Monday. Amar Ambani, Head of Research at IIFL, sees State Bank of India posting a net interest income of Rs. 108.57bn, a fall of 2.4% year-on-year. On the net interest margin front, Ambani sees a 33 bps YoY drop at 3.2%. He forecasts a 27.6% YoY drop in net profit at Rs. 27.15bn for India’s largest bank.
The advance-decline ratio favoured the bulls. On the Bombay Stock Exchange, 1,379 stocks advanced against 869 declines, while 152 stocks remained unchanged.
Volatility, as measured by India VIX, is down 3.85% at 21.19. It hit a day’s high of 22.04 and low of 20.59.
Ranbaxy, Hindalco, Cipla, Tata Steel, DLF, Maruti, PowerGrid, Bharti Airtel, Reliance Infrastructure, Bank of Baroda and Coal India gained while, SBI, Sun Pharmaceutical, Lupin, Dr Reddy’s Laboratories, Reliance Industries, GAIL, Hindustan Unilever and ONGC lost out.