The markets closed the week higher shrugging off any political concerns. Buying was seen in scrips across sectors. The cues from global peers supported the uptrend.
A brief mid-session drop brought back fears of another collapse, but the frontline indices found strength and surged in the afternoon, closing up nearly 2%.
The Sensex ended up 260.89 points, or 1.84%, at 14,424.87 while the Nifty closed up 75.20 points, or 1.83%, at 4,190.15. The index has recovered 535 points from week's low. It swung 810 points during the course of this week from 13,870 to 14,680.
On the other hand, the Nifty has recovered 140 points from the week's low. It swung nearly 222 points during the week from 4,040 to 4,262.
On the macroeconomic front, inflation for the week ended August 11 came in a tad higher at 4.1% as against 4.05% for the week ended August 4. The market had estimated it at 4.05%.
Metals, auto, capital goods, and oil and gas stocks were the outperformers in today's market. However, selling pressure is seen in select IT, realty, and pharma stocks.
BHEL, Tata Motors, Reliance Energy were among the top gainers on the Sensex. While the top losers on the indices were Dr Reddy's, Suzlon, HCL Tech, VSNL, and HDFC. Major gainers in the midcap space were JSW Steel, Arvind Mills, SEL Manufacturing, and Ashok Leyland. The Ashok Leyland scrip was up 2% on news reports that the company was planning a USD 700 million GDR issue.
In the forex market, the rupee had depreciated a little bit and was quoting at 41.09 against the dollar.
Deven Choksey of KR Choksey Securities, said, "We will once again have to look at the next week in totality. Today's gains are largely out of what we have seen in the earlier falls. Some of the negatives on which we have got some amount of clarity have become positive to a certain extent. Today's gain is largely attributed to that. At the end of the week if you stay positive, next week will also be largely positive for you. I feel it may have some positive bearing when it opens next week."
Speaking on today's market rally, Choksey said, "The Left parties have said that they are not interested in breaking the government, which itself is a sort of a relief to most people who were earlier fearing that if the election comes then probably another three-six months will go away from our hands. To an extent, I will call it only relief because the fundamentals of companies and markets are quite strong. Even the inflation data, which has come in today, are inline with the kind of targets which the government have set. People are quite confident about valuations, so anything which is available at lower levels and if certainty were provided as far as the future is concerned, then people wouldn't mind taking position in this market, and that's what exactly we have seen today."
Choksey is positive on domestic fundamentals but is skeptical on global cues, which could affect the market going forward. "The markets can touch previous highs, if you are looking at the Indian fundamentals. But if you look at global cues and some of the disturbing impact it can have on our market, it may get delayed. It is bound to happen for sure. My confidence comes largely out of the corporate fundamentals and the growth of the Indian economy," he added.
S P Tulsian of sptulsian.com said, "Both the global as well domestic political crisis seems to have subsided. Now, you can just say with some certainty that probably that will not recur for the next couple of months. You cannot take a definite call because nobody is capable of taking a call on the international sub-prime problem and what its depth is? Even on the domestic front, no one knows what the scenario will be."
He feels the Q2 results and overall monsoon will provide the next market direction. "The next kicker would only be the Q2 results, which will start flowing in from mid-October. The kharif agricultural production and overall monsoon would also be able to give direction to the market. We will be watching the performance and outcome of these two adverse factors, which are likely to reoccur, again may be in the next couple of weeks or so. In that scenario, I don't think that we can really expect to see new highs in the market, which is 15,500, or probably 4,500 on the Nifty. We are about 300 points short on the Nifty and about 1,200 points on the Sensex. We should remain happy if we hover around these levels for the next one-one and a half months and crossing or seeing news highs seems to be unlikely."
Madhusudan Sarda, Director, Mehta Equities, is bullish on midcaps in the banking, cement, capital goods and logistics space. "We definitely remain sector pickers. As far as our sectors of choice are concerned, they are banking, cement and capital goods, and some logistic stocks. Off these, we would definitely go for midcaps that are showing as much as 30-40% of topline and bottomline growth," he added.
On how stocks in the midcaps space are faring, Sarda said, "It's like the midcaps are taking a breather as far as our research outlook for the midcap space is concerned. We remain positive at lower levels in midcaps. This probably should be the beginning of fresh interest in midcap over the next six months to one year. We see this bottom as a buying opportunity."
Sarda is underweight on autos but likes some midcaps in the infrastructure space. In the midcap cement space, he is positive on most stocks that are showing as much as 40-50% year-on-year growth.
A brief mid-session drop brought back fears of another collapse, but the frontline indices found strength and surged in the afternoon, closing up nearly 2%.
The Sensex ended up 260.89 points, or 1.84%, at 14,424.87 while the Nifty closed up 75.20 points, or 1.83%, at 4,190.15. The index has recovered 535 points from week's low. It swung 810 points during the course of this week from 13,870 to 14,680.
On the other hand, the Nifty has recovered 140 points from the week's low. It swung nearly 222 points during the week from 4,040 to 4,262.
On the macroeconomic front, inflation for the week ended August 11 came in a tad higher at 4.1% as against 4.05% for the week ended August 4. The market had estimated it at 4.05%.
Metals, auto, capital goods, and oil and gas stocks were the outperformers in today's market. However, selling pressure is seen in select IT, realty, and pharma stocks.
BHEL, Tata Motors, Reliance Energy were among the top gainers on the Sensex. While the top losers on the indices were Dr Reddy's, Suzlon, HCL Tech, VSNL, and HDFC. Major gainers in the midcap space were JSW Steel, Arvind Mills, SEL Manufacturing, and Ashok Leyland. The Ashok Leyland scrip was up 2% on news reports that the company was planning a USD 700 million GDR issue.
In the forex market, the rupee had depreciated a little bit and was quoting at 41.09 against the dollar.
Deven Choksey of KR Choksey Securities, said, "We will once again have to look at the next week in totality. Today's gains are largely out of what we have seen in the earlier falls. Some of the negatives on which we have got some amount of clarity have become positive to a certain extent. Today's gain is largely attributed to that. At the end of the week if you stay positive, next week will also be largely positive for you. I feel it may have some positive bearing when it opens next week."
Speaking on today's market rally, Choksey said, "The Left parties have said that they are not interested in breaking the government, which itself is a sort of a relief to most people who were earlier fearing that if the election comes then probably another three-six months will go away from our hands. To an extent, I will call it only relief because the fundamentals of companies and markets are quite strong. Even the inflation data, which has come in today, are inline with the kind of targets which the government have set. People are quite confident about valuations, so anything which is available at lower levels and if certainty were provided as far as the future is concerned, then people wouldn't mind taking position in this market, and that's what exactly we have seen today."
Choksey is positive on domestic fundamentals but is skeptical on global cues, which could affect the market going forward. "The markets can touch previous highs, if you are looking at the Indian fundamentals. But if you look at global cues and some of the disturbing impact it can have on our market, it may get delayed. It is bound to happen for sure. My confidence comes largely out of the corporate fundamentals and the growth of the Indian economy," he added.
S P Tulsian of sptulsian.com said, "Both the global as well domestic political crisis seems to have subsided. Now, you can just say with some certainty that probably that will not recur for the next couple of months. You cannot take a definite call because nobody is capable of taking a call on the international sub-prime problem and what its depth is? Even on the domestic front, no one knows what the scenario will be."
He feels the Q2 results and overall monsoon will provide the next market direction. "The next kicker would only be the Q2 results, which will start flowing in from mid-October. The kharif agricultural production and overall monsoon would also be able to give direction to the market. We will be watching the performance and outcome of these two adverse factors, which are likely to reoccur, again may be in the next couple of weeks or so. In that scenario, I don't think that we can really expect to see new highs in the market, which is 15,500, or probably 4,500 on the Nifty. We are about 300 points short on the Nifty and about 1,200 points on the Sensex. We should remain happy if we hover around these levels for the next one-one and a half months and crossing or seeing news highs seems to be unlikely."
Madhusudan Sarda, Director, Mehta Equities, is bullish on midcaps in the banking, cement, capital goods and logistics space. "We definitely remain sector pickers. As far as our sectors of choice are concerned, they are banking, cement and capital goods, and some logistic stocks. Off these, we would definitely go for midcaps that are showing as much as 30-40% of topline and bottomline growth," he added.
On how stocks in the midcaps space are faring, Sarda said, "It's like the midcaps are taking a breather as far as our research outlook for the midcap space is concerned. We remain positive at lower levels in midcaps. This probably should be the beginning of fresh interest in midcap over the next six months to one year. We see this bottom as a buying opportunity."
Sarda is underweight on autos but likes some midcaps in the infrastructure space. In the midcap cement space, he is positive on most stocks that are showing as much as 40-50% year-on-year growth.
0 comments:
Post a Comment