Late recovery in Nifty amid uncertainty on UK poll results; Sensex snaps 4-week gains
Fri Jun 09 2017
Ramesh Sridharan (877 articles)

Late recovery in Nifty amid uncertainty on UK poll results; Sensex snaps 4-week gains

Late recovery helped the NSE Nifty close moderately higher on Friday despite uncertainty over UK elections results that indicated a possibility of hung parliament. However, the BSE Sensex failed to continue its four weeks gains as investors preferred a bit of profit booking.

The 30-share BSE Sensex was up 48.70 points at 31,262.06 and the 50-share NSE Nifty gained 21 points at 9,668.25, backed by HDFC Group and auto stocks. However, the selling in technology stocks and ITC capped gains.

Experts expect the consolidation to continue in coming sessions as investors awaited macro data (April industrial output and May inflation) due next week, but they don’t rule out a fresh record high.

Vibhav Kapoor of IL&FS sees sideways movements for the market in near term. According to him, if Nifty crosses 9650-9700 decisively, which has been a strong resistance point, then it could move towards 10,000-mark. If any correction happens in near term then that would not be deep, he said, adding that every dip should be bought.

Bourses in Europe were trading with half a percent gains after investors reacted to a hung parliament in the UK’s general election. British Prime Minister Theresa May’s Conservative party fell short of an outright majority that pulled British pound 1.5 percent lower against the US dollar and may lead to uncertainty over Brexit negotiations. Asian markets closed mostly higher.

Back home, the broader markets outperformed benchmarks. The BSE Midcap index gained 0.3 percent and Smallcap was up 0.5 percent despite balanced market breadth. About 1380 shares advanced against 1298 declining shares on the exchange.

For the week, the Sensex lost 0.03 percent while the Nifty gained 0.15 percent.

Nifty Bank ended at fresh record closing high again, up 0.66 percent due to HDFC Bank (up 1.3 percent) and ICICI Bank (up 0.75 percent).

HDFC extended gains, up 0.66 percent despite a media report suggested that merger of HDFC Standard Life Insurance and Max Life failed to get approval from insurance regulator. Max Financial, the promoter of Max Life, lost 3.4 percent.

Maruti Suzuki was the biggest gainer among Sensex stocks, up 3 percent to end at record closing high post May auto sales data released by SIAM. Tata Motors gained 1.4 percent and M&M was up 0.6 percent.

ITC slipped 1.7 percent after a report of Finance Ministry mulling divestment in tobacco stocks. GAIL corrected further, down 2 percent on downgrade to sell by Motilal Oswal.
Technology stocks continued to reel under selling pressure on pricing concerns. A media report indicated that Infosys founders may be looking to exit the company also caused selling pressure that dragged Infosys 0.8 percent. TCS was down 0.5 percent and Wipro declined 1.6 percent while Tech Mahindra lost 2.7 percent.

Ramesh Sridharan

Ramesh Sridharan

Ramesh Sridharan is our Stock Market Correspondent covering events and daily movements of stock markets in Asia. He is based in Mumbai

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