Market summary of the day : 09/06/2014

Jubilation continued on Dalal Street with both the frontline indices snapping the session above their psychological 25,550 (Sensex) and 7,650 (Nifty) levels, ending at fresh all time closing high levels on firm global cues coupled with hopes of wide-ranging reforms by the new government. Boisterous benchmarks once again showcased an enthusiastic performance with investors getting support from report that FIIs bought shares worth a net Rs 1283.04 crore on Friday. 

Some support also came after President Pranab Mukherjee in a joint session of parliament said that the new government will pursue a broad economic reform agenda focused on job creation through public and private investment that also makes containing inflation its top priority. Some comfort also came from Minister of Commerce Nirmala Sitharaman’s statement that the rising Current Account Deficit (CAD) and galloping prices are the issues which will be tackled on an urgent basis by the government and Finance Minister will announce important measures to reduce the CAD and curb rising prices. 

Supportive cues from US markets provided lead to local markets and sentiments remained up-beat on getting good jobs data on Friday, while the unemployment rate held steady, lower than expected. Asian markets ended mostly in the green on the back of better-than-expected Chinese exports data. Meanwhile, Japanese Nikkei edged higher after the country’s economy expanded by more than anticipated, 1.6% in the first quarter. European counters too traded mostly in the green in early deals on Monday. 

Back home, there was broad based buying witnessed in the markets and apart from the blue chips, the broader markets too equally participated in the rally. On the currency front, the RBI was spotted buying dollars via state-run banks starting around 58.99-59.00, continuing its heavy intervention to curb strength in the rupee. The rupee was trading at 59.08 per dollar at the time of equity markets closing as compared to today’s close of 59.17 per dollar. Meanwhile, shares of real estate companies edged higher after President in his joint address to the Parliament said that the government proposes proper housing to all citizens by 2022. 

Stocks related to railway such as Texmaco Rail, Kalindee Rail, Titagarh Wagons, Kernex Microsystems and Hind Rectifiers remained on buyers’ radar after Mukherjee said that the government will launch a diamond quadrilateral project of high-speed trains. Fertilizer stocks, RCF, Chambal fertilizers and Tata Chemicals were on investor’s radar after reports suggested of Government planning urea price hike to curb fertiliser subsidies. 

Nifty surged by over seventy points to end comfortably above its psychological 7,650 support level, while Sensex surged over one hundred and eighty points to surpass the psychological 25,550 mark. The broader markets too traded jubilantly throughout the session and ended the session with a gain of around two percentage points. The market breadth remained in favour of advances, as there were 2307 shares on the gaining side against 778 shares on the losing side while 82 shares remain unchanged. 

Finally, Sensex soared by 183.75 points at 25580.21while Nifty settled at 7654.60, up by 71.20 points. BSE Mid cap index was up by 1.47%, while Small cap index up by 2.13%. 

The top gainers on the Sensex were, Bajaj Auto up by 5.48%, Coal India up by 5.22%, L&T up by 3.51%, Tata Power up by 2.53% and Tata Steel up by 2.49%. On the flip side, ONGC down by 2.26%, Hindustan Unilever down by 

1.24%, SBI down by 1.18%, Axis Bank down by 0.71%, and Infosys down by 0.66% were the top losers in the index. 

On the BSE Sectoral front Realty up by 5.61%, Capital Goods up by 2.33%, India Infrastructure Index up by 2.30%, Power up by 2.15% and Consumer Durables up by 1.82%, were the top gainers, while Oil & Gas down by 0.36% and Bankex down by 0.16% were the only loser in the space. 

TECHNICAL PARAMETERS OF NIFTY: 

 Today, RSI was at 82, MACD positive above signal line; India VIX was at 15~. Nifty closed above all its major moving averages like 5 DMA (7506), 20 DMA (7317), 50 DMA (6969) & 200 DMA (6311) which all indicate that markets in a strong bull run and we may see sector and stock churning but momentum may continue to be bullish. However, Investors need to be cautious at higher level for any fresh entry while trading position may be taken with very short term views only.