Indian equity indices staged a smart recovery in last leg of trade today and ended the session slightly in the green, pairing all their early losses, supported by short-covering in beaten down but fundamentally strong stocks. Domestic bourses reeled under selling pressure during most of the session as investors turned cautious on report of poor monsoons, after weather officials highlighted that this year’s monsoon rains have been deficient so far and the rainfall between June and September could be between 90 and 96% of the long-term average. Also President Mukherjee had said that the current economic situation is extremely difficult and expressed the government's commitment to put India back on high growth path, while containing inflation and making tax regime non-adversarial.
Buying which emerged in late trade mainly acted as saving grace for domestic equity markets and helped domestic gauges to re-conquer their crucial 7,550 on Nifty and 25,650 on Sensex bastions. Some comfort also came after Society of Indian Automobile Manufacturers (SIAM) reported that domestic passenger car sales grew by 3.08% to 1,48,577 units last month as compared with 1,44,132 units in May 2013. Moreover, total two-wheeler sales during the month grew by 16.3% to 14, 02,830 units from 12, 06,173 units in the same period of the previous year.
Some support also came from report that FIIs bought shares worth a net Rs 536.68 crore on June 9. Meanwhile, stocks related to software and technology counters edged higher on the back of depreciation in rupee against dollar. Moreover, FMCG stocks, which lost steam after Indian Meteorological Department (IMD) forecasted rains to be below normal this year as the chances of El Nino occurring during monsoon being very high, too recovered by the end of trade.
On the flip side, shares of public sector undertaking (PSU) banks edged lower on profit booking. Additionally, fertilizer sector stocks witnessed selling as it has been reported that there is still no proposal to increase urea prices. There will be some buzz in infra stocks on report that the Ministry of Environment, Forests and Climate Change is in talks with at least seven States, to discuss pending infrastructure projects.
Nifty ended slightly higher to end above its psychological 7,650 support level, while Sensex edged marginally higher to regain the psychological 25,650 mark. The broader markets too pared most of their initial losses and ended the session mixed. The market breadth remained in favour of advances, as there were 1834 shares on the gaining side against 1272 shares on the losing side while 88 shares remain unchanged.
Top gainers on the Sensex were Cipla up by 2.73%, Infosys up by 2.76%, Wipro up by 2.73%, TCS up by 1.98% and Coal India up by 1.78%. While BHEL down by 2.87%, ONGC down by 1.74%, Tata Steel down by 2.60%, Hero MotoCorp down by 2.32% and SSLT down by 2.29% were the top losers in the index.
On the BSE Sectoral front, Consumer Durables up by 3.55%, IT up by 2.32%, TECk up by 1.98%, Healthcare Index up by 1.97% and FMCG up by 0.12% were the top gainers, while Realty down by 2.96%, PSU down by 1.28%, Oil and Gas down by 0.96%, Capital Goods down by 0.90% and Infrastructure down by 0.90% were the only loser in the space.
TECHNICAL PARAMETERS OF NIFTY:
Today, RSI was at 81(overbought), MACD positive above signal line; India VIX was at 17~. Nifty still above all its moving averages like 5 DMA (7554), 20 DMA (7344), 50 DMA (6990) & 200 DMA( 6322) which all indicate that market may attract profit booking at higher levels in selected stocks but the over all trend remains up in the medium to long term.
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