Mid market commentary June 01

Indian markets remained lull despite of better than expected GDP data that was released Tuesday after market hours. Markets opened on a flat to positive note, and hit just above previous high prices, but failed to sustain those levels. Currently both Nifty and SENSEX are trading with marginal gains of 0.3 per cent each, at 8180 and 26755 levels respectively.

Asian markets remained volatile ahead of concerns over the upcoming China’s manufacturing activity data that is expected to bring further weakness in Chinese economy.

India has posted its Nikkei/Markit manfacturing Purchasing Manufacturing Index (PMI), which stands at 50.7 in May as against 50.5 in April. Though higher, the data has reported the slowest growth since end of 2013. The slow pace was in the wake of slowdown in business from abroad. The level remains above the minimum expansion level of 50.

Market breadth remains positive with 1344 advances and 984 declines. Smallcap index has outperformed the benchmark indices and surged 0.5 per cent. On sectoral front FMCG sector has surged the most at 1.3 per cent. On the contrary PSU Banks have tumbled by more than 0.9 per cent.

Nifty Top Gainers: Adani Ports has surged 5 per cent and grabs the top position. Asian Paints is the second lead with 3 per cent gains. Infratel, Bharti Airtel and TCS follow with 2 per cent plus gains each.

Nifty Top Losers: Banking major Yes Bank has tumbled the most with 2 per cent losses. Hindalco follows with 1.6 per cent losses. Tata Motors and TATAMTDVR have fallen amid profit booking after a sharp rise in previous sessions. ICICI Bank has tumbled 1 per cent.

Nifty is still maintaining consolidation. Hence we hold our view of 8215 followed by 8340 as our next immediate resistances. On the downside, 8150 to 8090 will act as the immediate supports if today’s low is broken.

Stocks to watch:

Maruti Suzuki: Company has posted its May sales data where the sales show an increase of 7.1 per cent to 1.23 lakh units. The growth was driven by domestic business while exports failed to meet the expectations.

Indigo/Jet Airways: Aviation companies like Jet Airways, Indigo etc. are likely to get hurt with the government’s decision of hiking ATF prices by 9.2 per cent. This would increase the operating costs of the aviation companies.

Tata Steel: Tata Steel initiates sale of its UK business today. Tata Steel UK has completed sale of its European Long Steel business to Greybull Capital LLP for a nominal amount.

ONGC: ONGC has bought 15 per cent stake in Vankor oilfield in East Siberia for USD 1.27 billion from Russia's largest oil producer Rosneft.

Reliance Communications: The company apparently has suggested a reduction in its debt by 75 per cent through sale of mobile towers and merger of MTS, Aircel, sometime in June itself. The stock has surged 6 per cent thereafter.