Market starts week at record close; Sensex up 233 pts, Nifty above 11,100 after Economic Survey 2018
Mon Jan 29 2018
Rajesh Sharma (1997 articles)

Market starts week at record close; Sensex up 233 pts, Nifty above 11,100 after Economic Survey 2018

Bulls continued to keep their stranglehold over Dalal Street on the first day of Budget week as well as benchmark indices ended at fresh record closing high after Economic Survey 2018. However, broader markets were caught in a bear trap as the Nifty Midcap lost nearly a percent.

HDFC Group, technology and auto stocks helped the market close higher whereas the selling in ITC, ICICI Bank, Airtel, PSU oil & gas and select pharma stocks capped gains.

The 30-share BSE Sensex rallied 394 points intraday in run-up to the Budget 2018 before ending the day 232.81 points higher at 36,283.25.

The 50-share NSE Nifty crossed 11,150 levels intraday, before closing up 60.70 points at 11,130.40.

Government’s disinvestment plan for the next fiscal and surge in revenue collection figure under GST boosted sentiment. The market is expected to move up further in coming sessions, experts suggest.

“It’s the handful of index majors which are pushing the Nifty higher while the broader market is reeling under pressure. Such divergence does not last for long and eventually they’ll align,” Jayant Manglik, President, Religare Broking said.

Considering the scenario, it becomes prudent to limit leveraged positions and keeping the existing hedged, he advised.

Meanwhile, Economy Survey 2018 was presented in Parliament wherein the GDP growth was pegged at 7 to 7.5 percent in FY19 against 6.75 percent in FY18 as country’s economy should witness improvement in next fiscal year.

Private investment is poised for a rebound and employment, education & agriculture will be focus areas in the medium-term, the government said, adding the current high oil prices have become a major concern.

Housing finance company HDFC was the leading contributor to Nifty’s gains, rising 3.1 percent after strong Q3 earnings and stable asset quality, with healthy loan growth.

Maruti Suzuki shares gained 3.8 percent after healthy Q3 earnings and cut in royalty payment. Brokerage houses expect the stock to give up to another 22 percent return in next 12 months.

Dr Reddy’s Labs was biggest loser among Nifty50 stocks, falling 6 percent as analysts cut earnings estimates after Q3 weak earnings. Lupin was also under pressure, declining 4 percent.

Cipla was down 1 percent despite approval from USFDA for HIV drug, generic Viread tablet. Strides Shasun, however, gained over a percent after getting USFDA approval for the same drug.

HDFC Bank, TCS, IOC, Eicher Motors, Kotak Mahindra Bank, L&T and HUL among others gained 1-3.5 percent whereas ITC, ICICI Bank, Axis Bank, Bharti Airtel, HPCL, GAIL, ONGC and BPCL fell 1-4 percent.

Jaiprakash Associates, Fortis Healthcare, JSPL, Bhansali Engineering, Trident, Tata Coffee, Gruh Finance, Indian Hotels, Century Plyboards and NIIT Technologies were down 5-8 percent while L&T Infotech, Subex, Mphasis, KSB Pumps, Shakti Pumps, Ashok Leyland, Dish TV, Biocon and Crompton Greaves Consumer rallied 1-6 percent.

About two shares declined for every share rising on the BSE.

On the global front, Asian markets closed mixed after dollar edged up and greater China markets gave up early gains to trade lower in the afternoon. European stocks were mixed at the time of writing this article.

Rajesh Sharma

Rajesh Sharma

Rajesh Sharma is Correspondent for Stock Market of South East Asia based in Mumbai. He has been covering Asian markets for more than 5 years.