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Sensex pares gains, Nifty50 turns negative; Tata Steel up 4%

by April 20, 2016 General

NEW DELHI: The domestic stocks market witnessed healthy gains in the morning session of Wednesday’s trade, as the sentiment remained largely upbeat following an across-the-board rally in global markets on Tuesday.

The domestic bourses were closed on Tuesday on account of Mahavir Jayanti.

At 10.10 am, the S&P BSE Sensex was trading 101 points higher at 25,197, led by buying in index heavyweights such as HDFC, ITC, HDFC Bank, L&T, and Tata Steel.

The Nifty50 was trading comfortably above its crucial level of 7,900 supported by gains in power, oil & gas, metal, consumer durable, capital goods, and banking stocks.

Shares ARSS Infrastructure Projects rallied nearly 11 per cent after the company said it has bagged a work order amounting to Rs. 64.73 crore.

MindTree surged nearly 4 per cent after the company logged an 11 per cent rise in March quarter net profit, helped mainly by higher spending from clients and favorable currency fluctuations.

The rupee jumped 28 paise to 66.27 against the US dollar in early trade on Wednesday in line with the firm trend seen in other Asian currency markets.

The domestic currency had closed 9 paise higher at 66.55 against the greenback on Monday. The domestic currency market was closed on Tuesday on account of Mahavir Jayanti.

In Asia, Japan’s benchmark Nikkei 225 edged up 0.5 per cent in morning trading to 16,962.28. Australia’s S&P/ASX 200 added 0.3 percent to 5,271.80. South Korea’s Kospi gained 0.3 per cent to 2,016.81. Hong Kong’s Hang Seng fell 0.6 per cent to 21,307.82, while the Shanghai Composite inched up nearly 0.1 per cent to 3,044.98.

WHAT TOP EXPERTS ARE SAYING: Macquarie on MindTree: Expect strong 18.8 per cent dollar revenue growth in FY17

UBS on LIC Housing Finance: Earnings marginally lower due to higher provisions

Credit Suisse on Tata Consultancy: Revenue growth was balanced between the US and Europe

At 09:20 am: The 30-share index was trading at 25,828, up 12 point or 0.05 per cent. It touched a high of 25,953.83 and a low of 25,828.91 in morning trade.

The Nifty50 was trading at 7,910 down 4 point or 0.06 per cent. It touched a high of 7,950.40 and a low of 7,905.65 in the first 30 minutes of trade.

The S&P BSE Midcap Index was up 0.16 per cent and BSE S&P Smallcap Index was trading 0.39 per cent higher.

Tata Steel (up 2.4 per cent), HDFC (up 1.6 per cent), Axis Bank (up 1.6 per cent), Dr Reddy’s Laboratories (up 0.95 per cent), and Wipro (up 0.91 per cent), were the major Sensex gainers.

TCS (down 1.2 per cent), Maruti Suzuki (down 1.1 per cent), M&M (down 1.02 per cent) and Hero MotoCorp (down 0.8 per cent) were the major Sensex losers.

Pre-market: Domestic equity indices are likely to open on a lower note on Wednesday, as the market tries to catch up with its global peers after a public holiday. A couple of quarterly earnings and data on US crude oil inventories, scheduled for release later in the day, will influence market sentiment through the day.

Investor sentiment will also be influenced by Japan’s economic data released earlier in the day, as well as price swings in crude oil and heightened expectations from the impending European Central Bank’s (ECB’s) policy meet.

At 07:40 am, Nifty50 futures on the Singapore Stock Exchange were trading 19 points lower at 7,972. But Tuesday’s rally on SGX futures could mean a positive trend for the domestic market.

Technical charts suggest bulls on top: Technical charts hint that the Nifty50 is in a strong position to test the 8,000 mark in the near future.

“The Nifty50 has been making higher highs and higher lows from the past three sessions and till it holds above 7,850, the immediate trend and momentum may take it towards the next hurdle at 7,972-8,000 levels. On the downside, it has support near the 7,850 level. Below this level, long liquidation may attract profit booking, leading to a decline towards the next major support at 7,777, which is its 200-day exponential moving average,” said Chandan Taparia, Derivatives Analyst – Equity Research at Anand Rathi Financial Services.

Taparia advised investors to keep long positions intact, but only by keeping trailing stop losses. Some experts, meanwhile, expect Nifty50 to see selling in the 7,950- 7,980 range.

“If the index manages to breach that level, it will open the gates for higher levels. In the coming sessions, a lot of banks will be coming out with their Q4 numbers and we will be looking at them critically as Bank Nifty has higher weightage in the index,” said Mustafa Nadeem, CEO, Epic Research.

Q4 earnings to trigger stock-specific action: The day will see a handful of companies announcing their March quarter earnings. The list includes Wipro, Network 18 and Infomedia Press, among others.

“We believe everything points to revival in corporate earnings. What happens with the capex cycle, what happens with the reforms process and policies is what everybody is looking at. With better monsoon expectations, rural discretionary income and spending should go higher. The market is trying to factor in a lot of these things,” said Mayuresh Joshi of Angel Broking.

Asian markets stay sideways: Asian markets took a breather after rallying in the preceding session. The Japanese Nikkei rose 0.35 per cent to 6,531.90. China’s Shanghai Composite index fell 0.12 per cent to 3,038.68.

Other Asian indices, including Hong Kong’s Hang Seng (down 0.51 per cent), South Korea’s Kospi (up 0.09 per cent) and Taiwan’s TWSE (down 0.26 per cent), were trading mixed.

US markets failed to play catchup: The US market failed to play catchup with the global rally on Tuesday that saw major equity indices rally up to 3.5 per cent for the day amid a rebound in crude prices. Crude prices rose more than 1 per cent, shrugging off Sunday’s failed talks among oil producers to tackle a global glut, Reuters reported.

The Dow Jones industrial average closed 49.44 points, or 0.27 per cent, higher at 18,053.60. The S&P500 index advanced 6.46 points, or 0.31 per cent, to 2,100.80.