Mid Market commentary: May 16

Indian stock markets opened on a positive note but were rapidly dragged down by the major banks in the aftermath of marginally positive results from the PSU banks.  Nifty has hit below 7800 mark and is trading down by 0.4 per cent at Rs 7782. Bank Nifty has hit below 16500 which was its major support level. SENSEX too has shed 100 points and is below 24400 levels. All in all markets remain in consolidation on a daily basis.

WPI (Wholesale price index) inflation numbers have been released today. April WPI has risen by 0.34 per cent as against -0.85 per cent in the previous month and Bloomberg’s estimates of 0.23 per cent. The seasonal increase in food prices is putting pressure on inflationary trends.

We are approaching the assembly polls results for five states on 19th May. Any result against the Modi government led NDA may lead to some more correction and dictate the markets for few sessions.

Market breadth remained negative with 999 advances and 1211 declines. 119 stocks remain unchanged.  Midcap has underperformed the benchmark indices by falling more than 0.6 per cent.

On the sectoral front PSU banks have tumbled the most, by 5.5 per cent, dragged down majorly by Bank of Baroda. Thereby Bank Nifty and Financial service sector have fallen more than 1 per cent each. On the contrary, Media, IT and Pharma look marginally positive.

Top Nifty Gainers: Dr Reddy's grabs the top position with 3.2 per cent gains. Tech Mahindra and Asian Paints follow with 1 per cent up move. Bosch and Infratel are trading with nearly 0.9 per cent gains.

Top Nifty Losers: Bank of Baroda tumbled sharply to trade with 8.5 per cent losses. Other bank majors SBI and ICICI Bank follow with 4 and 3.2 per cent losses. Bharti Airtel saw a news based fall of 2.2 per cent. Axis Bank remains the fifth loser with 1.8 per cent loss.

Japan’s shares have soared after the government of Japan delayed sales tax hike set for April 2017. Asian markets remained marginally up, offsetting the weak China data.  China’s Industrial output, retail sales and fixed asset investments have risen slower than expected.

Nifty is trading in consolidation so far.  We hold 7820-7840 as immediate resistances for Nifty. On the downside, Nifty may slide further up to 7760 followed by 7680 mark.

Stocks to watch:

Bank of Baroda: BOB has tumbled more than 8 per cent after posting disappointing results where it posted a loss of Rs 3230.14 crore due to heavy provisions for bad assets.

GMR Infrastructure: The subsidiary of GMR, GMR Rajahmundry Energy announced that in absence of its long term fuel supply and power purchase deals, the lenders would adopt debt restructuring.

Raymond: Raymond is likely to deal with KKR & Co. and Blackstone to sell 20 per cent stake in its branded apparel business to fund expansion. The stock has surged 2 per cent and is likely to remain in focus.

Piramal Enterprises: Company recently announced acquisition of 4 Pfizer brands for Rs 110 crore by its consumer products division. The brands have high consumer pull; and are present in India since last 3 decades.

Nitin Fire Protection: The company grabbed multiple orders worth Rs 200 crore providing specialised protection for the power industry's in house engineered system. Company has received such a heavy order for the first time and would complete it in next one and a half year.