Daily Equity Report (28JUN 2012)
Indian equity markets up 0.31%.
Nifty up 21.10 pts and settle at 5141.90.
Sensex was up 52.47 pts at 16959.05.
Bank Nifty up 38.25 pts at 10008.35.
European markets were up with FTSE up by 40.13 pts at 5487.90, CAC up by 18.85
pts at 3031.56 and DAX up 30.15 pts at 6166.84
Dow future up 7.00 pts at 12493.00.
S&P/CS Composite-20 HPI y/y is -0.4M & previous -0.6M
Indian stocks closed with modest gains for a second straight day Wednesday. The
lacklustre trade saw the Sensex moving in a 100 point range, and the Nifty confined
in a 30 point band.
The BSE Sensex failed to hold on to the 17,000 mark, while the broader Nifty index
closed below the key resistance of 5,150.
Indian markets have been in a narrow range, refusing to go down despite
disappointment over the much anticipated measures to boost the economy.
However, with a change in guard in the finance ministry, markets anticipate that
there might be some urgency to kick start stalled reforms and cut down on India's
twin deficits. These steps will certainly raise foreign investors' confidence in Indian
Commodity stocks like Sesa Goa (3.7%), Tata Steel (2.5%), and Sterlite Industries
(1.8%) gained on positive global cues. US home sale prices rose for the first time in
seven months boosting sentiments in risk assets.
Power utilities like Tata Power (2.2%) and Reliance Infra (2%) were among the top
Nifty gainers on account of the steep rise announced in power tariffs in the capital.
Delhi is a big market for these firms.
IT stocks like HCL Tech (1.9%), Infosys (1.1%), and TCS (0.94%) also saw buying
Among the losers, Tata Motors (-3%) ended at the bottom of the Nifty index. Private
lender Kotak Mahindra (-1.7%) and cement major ACC (-1.3%) also saw selling
pressure. Oil and gas major Cairn India (-1.1%) fell on declining crude prices.
34 of the 50 stocks closed higher on the Nifty index. On the BSE 500 index, 56%
stocks managed to close higher, indicating some degree of buying interest in the
News you can use:
In a bid to check rupee's free falling against the US dollar, the Reserve Bank of
India (RBI) on Monday hiked the limit of external commercial borrowing (ECB) by
USD 10 billion. Moreover, the regulator also increased the limit of overseas
investment in government bonds by USD 5 billion to USD 20 billion.
European shares were called to open flat to slightly lower on Monday with Spain
at the forefront of investors' minds as it is expected to formally ask its euro zone
partners for 100 billion euros to recapitalize its banks.
Asian shares fell on Monday and the safe-haven dollar rose as concerns about
faltering global growth and Europe's intractable debt crisis continued to sap
investor confidence, but commodities steadied after a pummelling last week.
Fiis & Diis
NIFTY Daily pivots
5236.30 5205.45 5174.60 5158.25 5143.75 5127.40 5112.90 5082.05 5051.2
Daily Nifty Gainers
Daily Nifty Losers
Stock in ban period Stocks to watch
Nifty Daily Chart
Nifty looks bearish
Strategy: Sell on rise
Bank Nifty Daily Chart
Bank Nifty looks bearish
Strategy: Sell on rise
RELIANCE CAPIT. S
We head into a derivative contracts expiry week, with stock markets having climbed the
conventional `Wall Of Worry' syndrome. The week ahead will be volatile with a `Bullish Bias'
as sentiment has started to turn positive on the back of low oil prices and expectation of better
government performance on the back of the expected `rejig' on key posts being filled due to
Markets surprisingly did not react negatively to the `Status Quo' on rates announced by the RBI,
rating agencies downgrade threats and also ignored poor global cues to end the week up
marginally. The only `Joker in the Pack' continues to be the Rupee, which is limiting inflows by
touching new lows despite being very heavily oversold. The same was the sole reason for RBI
not cutting rates and easing money supply. Also oil marketing companies in their fortnightly oil
price revision stated the same reason for not cutting petrol prices. Rating agencies are also going
overboard in threats of downgrade to `Speculative grade' purely due to the sharper than expected
fall in the Rupee.
The Nifty now seems set to test the100 dma (day moving average) at 5198 and the Right
shoulder @ 5240/50, with support now @ 5074 which is the 200dma. The high Beta `Bank
Nifty' has again started to outperform the Nifty & will test the 100dma @ 10095 & the right
shoulder @ 10300.
Smart money continues to buy quality with the broader market now showing positive divergence
& mid cap stocks recording smart gains. This also indicates that purely by default how much
India's fundamentals tend to improve on the back of low Oil prices & which will actually see
Smart Money buy stocks with a longer term horizon. High Beta sector/stocks are being chased
with Defensive's continuing to underperform.
Globally markets continue to be `Haunted' by rising yields on Spanish, Italian & Portuguese
debt, which is seeing equities underperform. However the sharp commodity sell off has also seen
Gold lose some of its sheen & it ended near 1 month lows. The same is indicating that the
relative outperformance of Gold as an asset class may be over & we could see s mart money re-
The other factor being watched closely is the progress of Rains/Monsoon & the also in the US
certain disruption in Oil supplies due to seasonal Tropical Storms which will see Oil prices react.
With most of Europe now actually watching the Euro cup more than tracking the Euro, expect
rangebound moves globally & our own markets should see some more optimism with
prices/stocks seeking higher levels.
Factors to watch:
Rupee to stop falling?
Progress of rains/US storm impact on Oil Prices.
Low Bond yields expecting out of turn action by RBI?
Volatility ahead of F&O expiry.
Government Rejig: Who will be the FM?
Nifty support @ 5070 & resistance @ 5240.
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