Nilekani-led rally in Infosys lifts Sensex 155 pts, Nifty above 9900; Midcap up 1%
The 30-share BSE Sensex rallied 154.76 points to 31,750.82 and the 50-share NSE Nifty gained 55.75 points at 9,912.80 despite subdued global cues.
Experts feel the Nifty may face resistance at 20-day moving average of 9,925-9,950 but global cues will remain important. They expect some volatility ahead of expiry of August derivative contracts on Thursday.
“The prevailing dullness in our markets can be attributed to the recently concluded earnings season, which failed to cheer the participants at large. And now, the anxiety of derivatives expiry has taken over. We feel things would be clear by the end of this week,” Jayant Manglik, President, Retail Distribution, Religare Securities said.
Meanwhile, one can focus on the risk management aspect and keep a close watch on upcoming data viz. GDP, auto sales for further cues.
Infosys was the leading contributor to Sensex’ gains, up 3.14 percent as analysts upgraded the stock after co-founder Nandan Nilekani joined the company again as non-executive chairman.
CLSA upgraded the IT bellwether to buy from underperform and raised the target price to Rs 1,070 from Rs 940, saying Nilekani’s return gave the company the best start in 6 years to regain leadership stability.
Dr Reddy’s Labs lost 2 percent after a law firm representing a purported investor has filed a class action suit in a USA court against the company and its key executives for alleged violations of American federal securities laws.
Asian Paints, HUL, Adani Ports, Hero Motocorp, Sun Pharma, Axis Bank and NTPC among others gained 1-2 percent whereas Tata Motors lost 1 percent. Reliance Industries and HDFC Bank were moderately lower.
The main attraction today were the broader markets that outperformed benchmarks and gained 1 percent on positive breadth. About two shares advanced for every share falling on the BSE.
The rally in midcaps was largely led by non-banking finance companies like Bajaj Finance, L&T Finance Holdings, Reliance Capital, Capital First, DHFL and Ujjivan Financial that gained up to 7.5 percent.
Bajaj Finance crossed the market capitalisation of Rs 1 lakh crore, up 3.6 percent.
Adani Enterprises surged 9 percent as the company said it would start work in October on its Carmichael coal project in Australia using USD 317 million of its own funds. CESC share price ended at record closing high of Rs 1,020.15, up 6.65 percent on value buying ahead of demerger.
Nestle India jumped 6.6 percent after analysts’ meet last week. CLSA pleased with the CEO’s focus on growth and upgraded the stock to outperform from underperform with increased target price at Rs 7,550 (from Rs 6,800 earlier), though 6 percent rise in marketing spend for launches in first half of 2017 is a bit disappointing.
Avenue Supermarts saw a late rally today, up 5.16 percent to end at fresh record closing high of Rs 1,045.75.
DLF shares lost 3.65 percent despite the deal between the company and Singapore-based GIC for stake sale in DLF Cyber City Developers for Rs 8,900 crore. The company expects Rs 13,000 crore infusion post this deal. However, the fall was may be due to the long period in getting this stake sale proceeds.
European markets traded lower by half a percent as the euro hit a two-and-a-half year high after ECB President Mario Draghi’s comments at Jackson Hole meeting. Asian markets ended mixed, with China’s Shanghai Composite up 1 percent. NYMEX crude oil was down over a percent at USD 47.29 a barrel after Hurricane Harvey hit US petroleum industry.
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