Mid Market commentary May 31

Indian stock markets kicked off on a positive note but retreated after making new lows to trade in the negative territory. All in all the benchmark indices are at a breather after consecutive upbeats in previous sessions. Nifty is hovering at 8150 mark while SENSEX is down by 60 points at RS 26665.

Market breadth remains negative with 811 advances; and 1412 declines. Broader markets are more or less in line with the benchmark indices where both Smallcap and Midcap sectors are down 0.3 and 0.2 per cent, respectively.

India’s GDP poll is out which suggests quarter ended March 2016 GDP at 7.6 per cent and Gross Value Added at 7.3 per cent. Agriculture data may improve by 1.6 per cent. On the contrary Manufacturing may not hold 12 per cent growth.

On the sectoral front Auto has outperformed the market and all other sectors by climbing 2.2 per cent, pulled upwards by the Tata Motors and TATAMTDVR, post results. On the contrary defensives like Pharma and IT sectors remain down by more than 1.6 and 1.3 per cent, respectively.

Top Nifty Gainers: Tata Motors and TATAMTDVR rose 9.3 and 7.5 per cent respectively in the wake of positiveQ4 results. Hindalco, Auro Pharma and Tata Steel follow with 4, 3.7 and 2 per cent gains, respectively.

Top Nifty Losers: Sun Pharma dropped 5.7 per cent after posting its Q4 results and ahead of concerns over muted results in the coming quarter. GAIL, Infy, TCS and Tata Power followed with 2.5, 1.9, 1.7 and 1.1 per cent losses respectively.  

Asian markets however, have surged fairly after Japan posted better than expected data for April and there was continued buoyancy due to the news related to the delay in sales tax hike. Nikkei 225 and Hang Seng rose 1 per cent each. Europe too has opened on a positive note.

Nifty needs to recover from today’s fall to confirm further upside rally where we hold 8215 i.e. today’s high followed by 8340 as the resistances for Nifty. However, if Nifty makes an engulfing pattern followed by a confirmation in tomorrow’s tick, we may see some correction in the Nifty up to 8000 if 8150 is broken.

Stocks to watch:

Titan: Titan along with other jewellery stocks shined after the government rolled back 1 per cent tax on cash purchase of gold jewellery. Moreover, Titan will be a part of MSCI India index from next month.

Raymond: Raymond is planning to venture into the FMCG group for extending its apparel brand to various personal and home care products.

Rolta India: The stock of the company has tumbled more than 7 per cent after the company defaulted on interest payment. The stock has been downgraded by rating agencies.

Grindwell Nortan: The stock rallied 14 per cent after board recommended bonus shares in the ratio 1:1, post results.   

Spicejet: Delhi high court has reserved order in the company’s K Maran case dispute. Court has given interim relief and continues to be in favour of K Maran. The stock is likely to remain in focus.