Sensex, Nifty maintain northward journey for 5th day; PSU Bank outperforms
The 30-share BSE Sensex gained 83.20 points at 33,561.55 and the 50-share NSE Nifty rose 15.40 points to 10,342.30.
Overall it was a volatile session for the market and stock specific action continued. Investors turned cautious on expectations of likely continuity in Fed rate hike after recent comments by Fed Chairwoman Janet Yellen, and also due to rising oil prices. Apart from that, the key trigger to watch out for in near term would Gujarat Assembly elections.
“Global market is expecting the US Federal Reserve to again hike Fed Fund rates by 25 bps. Slowly, best of global liquidity and rate conditions are reversing across economies,” Aneesh Srivastava, CIO, IDBI Federal Life Insurance said.
If this reversal continues along with a bounce back in the economic growth, it may not be all that bad for stock markets. However, if the reversal happens and the growth disappoints, it would be bad for markets, he added.
He said it is difficult to predict the outcome of elections; however, the performance of BJP government has been satisfactory and markets are building in the reappointment of BJP government in state elections.
On the global front, Asian stocks ended higher on positive lead from Wall Street, with Hong Kong’s Hang Seng closing above 30,000-mark. European markets were mixed at the time of writing this article. Brent crude futures were trading above USD 63 a barrel, rising over a percent.
Back home, the broader markets mildly underperformed benchmarks, with the BSE Midcap index ending flat. The market breadth was balanced as about 1,390 shares declined against 1,300 advancing shares on the BSE.
Private banks were under pressure but PSU Bank index outperformed all, rising 1.3 percent after sources told CNBC-TV18 that the cabinet has cleared ordinance to amend the Bankruptcy Code that is likely to be effective from Thursday.
Profit taking was seen in pharma companies. Nifty Pharma as well as Metal indices declined 0.7 percent each.
Zee Entertainment Enterprises was biggest gainer among Nifty 50 stocks, rising 4 percent. Macquarie has reiterated strong outlook for advertising and subscription growth starting second half of FY18. It has maintained outperform rating on the stock with target price at Rs 615 per share.
HDFC, ITC, HDFC Bank, SBI, Tata Motors, Maruti Suzuki and GAIL gained 0.5-1 percent while Bajaj Finance, Bharti Infratel, Vedanta, IndusInd Bank, Axis Bank, Tech Mahindra and Aurobindo Pharma were down 1-2 percent.
Mindtree was up 2 percent after Motilal Oswal upgraded the stock to buy as it expects a revival in revenue growth momentum.
United Spirits rallied 3 percent. Edelweiss has a buy call on the stock with a price target of Rs 3,710 as it believes liquor stocks have better moat than most staples. The company is well placed on the back of price hikes, soft input prices, improving business sanity and compliance, it feels.
Future Retail surged 12 percent after the company plans to launch a new digital model — Retail 3.0 — which will blend technology with brick and mortar retail. The new avatar will be called Tathastu. These retail stores will enable online shopping for consumers. Broking firm Edelweiss is upbeat about the stock and maintained a buy call with a target of Rs 628.
The rally also spilled over to other Future group stocks. Futures Consumer, Future Lifestyle and Futures Enterprises gained 3-7 percent.
TeamLease Services surged 10 percent as global investment management firm T Rowe Price picked up 5 percent stake in company. Bata and Mirza International fell 2 percent on profit booking after sources told CNBC-TV18 that the cabinet committee has deferred the incentive package for leather industry.
