After witnessing correction in previous two trading session, Indian equity markets staged a smart recovery and accumulated gains of over 1.25%, which lifted both Sensex and Nifty higher above psychologically crucial 25,500 and 7,600 levels respectively today. Much of the session’s gains were bargained by the bourses in the last hour of trade as marketparticipants scrambled to cover their pending short positions, with some of them also initiating fresh bets of select-blue chip stocks available at attractive valuations after recent drubbing.
Initially, the benchmarks after wandering in no-man’s land for most part of the session, drifted lower in afternoon deals in absence of any positive trigger, which could lift the markets higher. Nevertheless, buoyed by the recovery of European counterparts, the Indian equity markets staged a smart recovery by close of trade and snapped two consecutive sessions’ losing streak. Meanwhile, broader indices also gaining in line with frontline indices went home with gains in the range of 1.50%-2.00%.
On the global front, Asian shares settled mostly positive, though the double-whammy of a deepening conflict in Iraq and a gas dispute between Ukraine and Russia kept the gains in check. Brent crude prices remained near nine-month highs after militants from the Islamic State of Iraq and the Levant (ISIL) group seized a large swathe of northern Iraq and threatened to capture a key oil refinery. The insurgent advance forced Washington to not only consider options for military action but also hold brief talks with Iran, its long-time foe, to support the besieged government in Baghdad. Meanwhile, European shares edged higher on Tuesday, boosted by hopes for mergers and acquisitions among healthcare companies and rebounding from losses caused by geopolitical concerns.
Closer home, in the stellar session of trade, where broad-based buying took place, only stocks from Fast Moving Consumer Goods counter acted as spoilsport. On the flip side, stocks from Oil & Gas, Public Sector Undertaking (PSU) and Banking counters were the top gainers of the session. In non-sectoral gauge activity, fertilizer stocks rallied in the range of 8%-10% on hopes of announcement of reforms for the sector in the upcoming budget to be presented by the new government.
Besides, tyre stocks too were in top gear, with stocks of JK tyre and CEAT hitting 52 week high level during the session. The market breadth on the BSE ended positive; advances and declining stocks were in a ratio of 2049:950, while 111 scrips remained unchanged. (Provisional)
The BSE Sensex gained 330.71 points to settle at 25521.19. The index touched a high and a low of 25545.88 and 25104.50respectively. Among the 30-share Sensex, 23 stocks gained, while 7 stocks declined.
The broader indices too traded with traction and ended in the green; the BSE Mid cap index was up by 1.50% and Small cap index was up by 2.03%.
On the BSE Sectoral front, Oil and Gas up by 2.86%, PSU up by 2.74%, Bankex up by 2.28%, Infrastructure up by 2.01% and Capital Goods up by 1.93% were the top gainers while, FMCG down by 0.17%, was the lone loser in the space.
The gainers on the Sensex were ONGC up 4.34%, Axis Bank up by 3.99%, SSLT up by 3.33%, BHEL up by 3.11% and RIL up by 2.83%. On the flip side, the key losers were M&M down by 1.89%, Hero MotoCorp down by 0.79%, Dr Reddys down by 0.58%, HUL down by 0.52% and Bajaj Auto down by 0.34%.
Meanwhile, Steel Ministry’s latest report highlighted that Indian steel industry is likely to face raw material supply crunch in future. As per the report, concerns like environmental constraints, mining caps, inadequate infrastructure to move iron ore, and the strain on overall reserves could impact the raw material supply to domestic steel players.
India VIX, a gauge for markets short term expectation declined 1.59% at 17.69 from its previous close of 17.98 on Monday.
European markets were trading in green; UK’s FTSE 100 up by 0.18%, Germany’s DAX up by 0.49% and France’s CAC 40 was up by 0.10%.
TECHNICAL PARAMETERS OF NIFTY
Today, RSI was at 70, MACD positive below signal line; India VIX was at 18~. Nifty closed below its immediate short term moving averages like 5 DMA (7597) but still above 20 DMA (7445), 50 DMA (7083) & 200 DMA (6377) which all indicate that market may face some resistance at higher levels due to profit booking but overall trend is remains positive in the medium to long term. Investors may accumulate on dips and book profits in selected counters.
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