Reliance Industries, IT stocks help Sensex gain 124 pts, Nifty hold 9900; telecom dips
The market regained momentum in last hour of trade Friday, with the Nifty closing above 9,900-mark despite weakness in global peers. The recovery was driven by Reliance Industries, technology and select banks stocks while telecom, infra and healthcare stocks capped the upside.
The 30-share BSE Sensex was up 124.49 points at 32,028.89 and the 50-share NSE Nifty gained 41.95 points at 9,915.25 while the broader markets underperformed, with the BSE Midcap and Smallcap indices closing flat.
The market lost momentum in afternoon trade and the Sensex shed nearly 100 points on profit booking but recouped losses in last hour of trade due to renewed buying interest.
“Such fluctuations are normal during consolidation but we suggest keeping leveraged positions hedged,” Jayant Manglik, President, Retail Distribution, Religare Securities said.
He further said midcap and smallcap are still struggling perhaps due to stretched valuations as investors wish to see how the earnings pan out and waiting for some correction for fresh entry.
Meanwhile, Vibhav Kapoor of IL&FS recommends exercising caution once the Nifty hits 10,000-mark.
“It is a level from where you need to be careful. The market has gone up a lot. From this point, valuations are very expensive when the earnings are tepid,” he reasoned.
The market breadth recovered towards the close but still ended weak. About 1,424 shares declined against 1,255 advancing shares on the BSE.
For the week, the Sensex and Nifty gained 0.3 percent each while the Nifty Midcap index ended flat.
Reliance Industries ended at fresh 9-year high of Rs 1,586.20, up 3.76 percent after Chairman and Managing Director, Mukesh Ambani announced bonus issue in the proportion of one share for every share held and unveiled the JioPhone with refundable deposit of Rs 1,500 for three years and monthly rental of Rs 153.
Telecom as well as cable operators fell sharply after Jio offers. Bharti Airtel, Idea Cellular (though recovery sharply towards the close), Dish TV, Hathway Cable and GTPL Hathway were down 2-6 percent.
Wipro was biggest gainer among Sensex stocks, up 6.5 percent after higher-than-expected worth (Rs 11,000 crore) of share buyback and good June quarter earnings despite subdued Q2 dollar revenue guidance and analysts’ negative stance. The rally was spilled over to other technology stocks like TCS (up 1.9 percent), Infosys (1.1 percent) and HCL Technologies (2 percent).
Lupin shares lost 2 percent after sources told CNBC-TV18 that US Food and Drug Administration will begin inspection of company’s Pithampur (in Madhya Pradesh) unit 1 from Monday, July 24.
Kotak Mahindra Bank rebounded nearly 2 percent after yesterday’s loss due to earnings. Tata Motors (up 1 percent) and Coal India (2.66 percent) were other major gainers whereas HDFC, ITC, HDFC Bank and L&T were moderately under pressure.
Jaiprakash Associates rallied 15 percent after ace investor Rakesh Jhunjhunwala picked up 1.03 percent stake in the company during April-June quarter. Jaypee Infratech and Jaiprakash Power Ventures also surged nearly 10 percent.
Jhunjhunwala also bought 1.26 percent stake in Jubilant Life Sciences that gained over a percent.
Ashok Leyland, RBL Bank, Can Fin Homes and DHFL declined up to 3.8 percent after June quarter earnings.
Sugar stocks gained momentum in late trade as Simbhaoli Sugar, Shree Renuka Sugar, Sakthi Sugars, Bajaj Hindusthan and Dhampur Sugar rallied up to 17 percent.
European markets were lower as fresh corporate earnings failed to boost shares. France’s CAC and Germany’s DAX fell nearly 1 percent at the time of writing this article. Asian markets also closed mostly lower.
Disclaimer: Reliance Industries Ltd. is the sole beneficiary of Independent Media Trust which controls Network18 Media & Investments Ltd.
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