26th August, 2013 : Comments by Amar Ambani, Head of Research, India Infoline
After enjoying two consecutive days of gains, a highly volatile session ended on a flat note on Monday. The NSE Nifty which managed to surge above the 5500 mark during the day, just manged to end above the 5450 mark, while BSE Sensex ended above the 18500 level.
After opening with a gap up in early trades the benchmark indices slipped sharply and remained under pressure throughout the day. Markets did manage to stage a smart comeback in the mid afternoon trades. However, it was short lived as selling pressure in the banking, oil and gas, PSU stocks dragged the markets to end near day’s low.
Among the top gainers were, power, capital goods, healthcare and metals stocks. Infact the mid-cap and the small-cap index outperformed the benchmark indices.
Finally, Sensex closed at 18558 up 38 points, while Nifty closed at 5,476 up 4 points over the previous close.
IDFC, Axis Bank, ONGC, GAIL, ICICI Bank, Lupin, Kotak Bank, Tata Steel, Reliance Infra, Tata Power and ONB were among the top laggards in the Nifty. While, Sesa Goa, BHEL, JP Associates, Ranbaxy, Ambuja Cement and Cairn India were among the top gainers.
The advance-decline ratio favoured the bulls. On the BSE, 1299 stocks advanced against 991 declining stocks, while 148 remained unchanged.
The INDIA VIX was up 2.5% at 26.38. It hit a day’s high of 27.43 and low of 24.72.
Hexaware was in the limelight, the stock surged over 6% and closed at Rs128.5 after the board of the company approved the purchase of a controlling stake in itself by Baring Private Equity Partners Asia for about US$400mn. Commenting on the same, Amar Ambani Head of Research at IIFL said, “conclusion of Hexaware’s stake sale last week gives an indication of the sustained long term growth prospects for niche mid-tier IT players with well established and long term client relationships”. He added we are positive on Indian IT and within the mid-tier IT space we like Mindtree and KPIT Technologies.
Stocks in News
Axis Bank closed at Rs.931, down by Rs.50.50 or 5.15%. The private bank raised interest rates on foreign currency non-resident (FCNR) and non-resident external (NRE) deposits of tenure more than three years.
Drugmaker Ranbaxy surged Rs.16.85 or 4.38% to close at Rs.401.15 after reports stated that the company identified smaller markets such as Peru, which do not contribute significantly to profits.
VIP Industries stock jumped 8.1% or Rs.4 to close at Rs.53.50 after reports came out that billionaire investor Rakesh Jhunjhunwala bought 1.03mn shares of the company via open market, upping his stake in the company.
ONGC slipped Rs.10.05 or 3.63% to close at Rs. 266.65. Its foreign arm OVL signed a definitive agreements on 24th August 2013 with Anadarko Moçambique Area 1 Limitada to acquire a direct 10% participating interest in the Rovuma Area 1 Offshore Block in Mozambique for US$ 2,640 mn.
Jindal Steel and Power stock inched up by Rs.4.95 or 2.06% to close at Rs.245.50 after acquiring a 52% majority stake in Gujarat NRE Coking Coal. The deal would enable it to secure resource supply and minimise risk in prices, stated reports.
Global markets
Asian stocks rose for a second day after a slump in US home sales eased speculation. MSCI’s broadest index of Asia-Pacific shares outside Japan edged higher by 0.3% while, Singapore’s Straits Times rose 0.3%. China’s Shanghai Composite index was up 1.4% while Hong Kong’s Hang Seng added 0.5%.
European stocks were trading with a slight negative bias, the CAC index in France was down 0.7% and DAX index in Germany was down 0.3%. The FTSE index in UK was shut.