Nifty snaps 3-day gains but manages to hold 8400; up 2% for week
The market failed to extend gains for fourth consecutive session Friday as the Nifty ended flat with a negative bias but managed to hold the 8400-mark. Technology stocks dragged the market lower but index heavyweights ITC, HDFC and Reliance Industries capped the downside. Fall in December CPI inflation and unexpected growth in November factory data despite currency demonetisation also supported the market.The 30-share BSE Sensex was down 9.10 points at 27238.06 on profit booking after a 317-point swing intraday. The 50-share NSE Nifty fell 6.85 points at 8400.35 after hitting an intraday high of 8461.05 and low of 8373.15.
Experts say they expect the market to continue to see pre-Budget rally, though there may be some consolidation intermittently. They see 8500-8700 levels on the Nifty before the Union Budget.
The Nifty might consolidate around the current levels for a session or two before further up move, Jayant Manglik of Religare Securities feels.
Vinod Nair of Geojit BNP Paribas says the market is turning cautious in spite of a good start to the result season. This he believes is largely due to the fact that India had a handsome pre-Budget rally in the last two weeks. Additionally, global market will be watchful next week as US President-elect Donald Trump will assume office and his economic agenda will be the key factor to influence the market, he says.
For the week, the Sensex gained 1.8 percent and the Nifty jumped 1.9 percent while the broader markets outperformed with the Nifty Midcap rising 2.2 percent. Nifty Bank and Metal rallied 3.5 percent and 5.5 percent, respectively.
Meanwhile, India’s index of industrial production jumped to a 13-month high of 5.7 percent in November 2016 against a contraction of 3.8 percent in year-ago month. Inflation based on the consumer price index (CPI) slipped to a 25-month low of 3.41 percent in December 2016 against 3.63 percent in previous month.
IT major TCS shares plunged 3.9 percent despite delivering steady earnings in December quarter. Investors are cautious about the leadership transition at the IT service company while H1-B visa issue still persists. In a surprise move, Natarajan Chandrasekaran, CEO and Managing Director of TCS has been named the new Chairman of Tata Sons while Rajesh Gopinathan, currently CFO and Vice President, TCS will take the position of CEO.
Infosys lost 2.5 percent on profit booking after reporting mixed set of earnings. Profit (up 2.8 percent QoQ) and margin (up 0.2 percent) beat analysts’ expectations but the company lowered its full year constant currency revenue guidance in dollar terms to 7.2-7.6 percent from 7.5-8.5 percent earlier.
Axis Bank jumped 4 percent on hopes lower slippages and stable asset quality in December quarter. The private sector lender will announce December quarter earnings next week.
Maruti Suzuki, NTPC, Tata Motors and L&T were down 0.7-1.5 percent while ITC, HDFC, Sun Pharma and GAIL gained 1-2 percent. Telecom stocks were under pressure; Idea Cellular tanked 4.6 percent, Reliance Communications was down 3.4 percent and Bharti Airtel slipped 0.76 percent.
Shares of SpiceJet was up 2.5 percent after the low-cost carrier announced a mammoth deal worth Rs 1.5 lakh crore to purchase 205 aircraft from the US-based aircraft maker Boeing. The move is a part of the airline’s expansion plans to domestic and international destinations, chairman and managing director, Ajay Singh, said in a statement to the exchanges.
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