Nifty inches towards 8850, Midcap outperforms; JSPL most active

11:48 am Midcap at record high:
The Nifty Midcap 100 hit a record high of 16316.30. Jindal Steel, Torrent Pharma, SPARC, SAIL, Reliance Communications, Pidilite Industries, NMDC, Karur Vysya Bank, Just Dial, Crompton Greaves, Emami, DCB Bank, and Adani Ports rallied 2-8 percent.

In fact, the broader markets continued to outperform benchmarks, rising a percent.

11:30 am Earnings estimates: Ambuja Cements’ fourth quarter profit is seen rising sharply by 50.1 percent year-on-year to Rs 165 crore but revenue may fall 7.1 percent to Rs 2,210 crore, according to average of estimates of analysts polled by CNBC-TV18.

Likely increase in profit may be due to lower other income and higher tax in base year.

Ambuja Cements has high exposure to West and North India. Sales volumes may fall 7 percent to 5.1 million tonnes from 5.5 million tonnes due to weakness in cement demand (on cash crisis) through the quarter.

Operating profit may fall 14.5 percent year-on-year to Rs 280 crore and margin may contract 110 basis points to 12.7 percent due to low utilisations, realisation pressure and cost surge. Higher petcoke usage could also hurt operating performance.

11:15 am FII View: Laurence Balanco of CLSA says as suspected, the Nifty is hesitating below resistance provided by the March 2015 and September 2016 highs at the 8,989-9,191 area following the initial breakout form the November-December 2016 double-bottom pattern.

Nevertheless, as long as price action remains above the rising 50-DMA, currently at 8,396 the benefit of doubt should be given to the newly formed uptrend and the ultimate break above 8,989-9,191 resistance, he says, adding above the all-time highs the next upside target is at 10,350-10,370.

Balanco says as far as support levels go, initial support is seen at the 8,538-8,555 area followed by the 50-DMA, 200-DMA and upper boundary of the November/December 2016 basing pattern at 8,252-8,396.

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11:00 am Market Check

The market gained some strength in morning, with the Nifty inching towards 8850 level amid consolidation while the broader markets outperformed benchmarks.

The 30-share BSE Sensex gained 48.10 points at 28516.85 and the 50-share NSE Nifty rose 15.15 points to 8836.85.

The BSE Midcap and Smallcap indices climbed 0.7 percent each on strong breadth. More than two shares advanced for every share falling on bourses.

Idea Cellular shares rallied 3.6 percent as media reports suggested that Vodafone-Idea merger may be announced by end of the month. The rally also spilled over to other telecom stocks – Reliance Communications gained 6 percent and Bharti Airtel rose 2.5 percent.

Jindal Steel was the biggest gainer among midcap stocks and also the most active stock on bourses, up nearly 8 percent.

TCS gained 1.5 percent ahead of board meeting for announcement of share buyback.