Mid Market Commentary May 20

Indian markets have opened on a flat note and have been witnessing  range bound volatility throughout its morning session. So far both Nifty and SENSEX have retained consolidation on daily basis despite of huge news based triggers, as all eyes are on the stock specific moves.

The SEBI has tightened norms on P-Notes by imposing transfer limits and seeking further disclosure. However, markets did not see any decline with respect to the news. SEBI’s step will regulate the markets and bring in more transparency about the foreign flows.

Nifty is hovering around 7800 mark while SENSEX is trading at 25450 levels at an upside of 50 points.
Market breadth remains negative with 969 advances; and 1157 declines.

Mid-cap sector is trading in line but Small-cap sector has underperformed the benchmark indices with marginal losses.

On the sectoral front Pharma has declined the most by 1 per cent dragged down by Lupin that decreased 8 per cent post results. Realty sector follows with 0.75 per cent losses. Few sectors like FMCG and Media remain marginally up with half a per cent gains.

Top Nifty gainers: Adani Ports grabs the top position for recovery after consistent downfall in the month of May. The stock surges 3.4 per cent. Tata Power and ONGC follow with 1.5 per cent gains each. IDEA and HDFC too remain strong with 1.2 per cent gains.

Top Nifty losers: Lupin leads as the top loser with 7 per cent decline. BPCL, Tata Steel, ICICI Bank and Ultratech Cements follow in the losers’ list.

Asian markets too have recovered from previous negative sentiments ahead of FED’s signals to hike interest rate in June policy review; and have witnessed a short covering.

Nifty is hovering around 7790-7800 levels. We maintain our view of 7770 as the support followed by 7680 levels. On the upside, 7855 is the next target if Nifty breaks out of 7810 levels. Positive moves towards clearance of GST where almost all the political parties are in favour could be a positive trigger in the near term.

Stocks to watch:

Lupin: Lupin, a pharma major is refraining the benchmark indices from gaining further. Lupin has tumbled almost 7 per cent ahead of USFDA concerns about its Goa plant. Lupin had received form 483 from USFDA showing possibility of violations of the terms. Lupin has responded to that effect and is awaiting approval.

Pidilite Industries: Pidilite Industries has surged 4 per cent after company reported 49 per cent rise in its quarterly net profits to Rs 115.1 crore.

Tata Power: Tata Power has won 100 MW solar power project in Karnataka at a tariff of Rs 4.79/ kWh.

Castrol India: UK's British Petroleum has reduced its stake in Castrol India after it sold 11.5 per cent stake in the lubricant firm for about Rs 2,075 crore.

ITC, IDBI Bank, Bank of India and Britannia : These are likely to remain in focus today ahead of their quarterly results.