Mid market commentary June 02

Indian markets are still maintaining consolidation wherein the benchmark indices have opened on a negative note, have tried to reverse the trend, but retreated again to trade in red. Market breadth remained negative with 1022 advances and 1269 declines. Smallcap sector remained flat while Midcap outperformed with 0.13 per cent rise.

Asian markets have retreated for profit booking, offsetting 5 upbeats amid muted China PMI data and ahead of ECB policy and OPEC meets' conclusions to be released later in the day. India also has Current Account Deficit (CAD) data to be released today which is expected to decline or show current account surplus after a decade.

On sectoral front Metal has surged the most by 1.2 per cent, pulled upwards by Coal India that has risen more than 3 per cent. On the contrary FMCG sector has dropped almost 1 per cent dragged down by ITC which tumbled 2.2 per cent.

Nifty top gainers: Apart from Coal India, IDEA and Hindalco surged 2 per cent and more. Auto majors Hero MotoCorp and Tata Motors followed with 1 per cent gains after robust sales from overall auto sector for the month of May.

Nifty top losers: ITC; and IT majors Wipro and Hindalco are the top losers with 2 per cent plus losses. Pharma majors Lupin, Auro Pharma and Sun Pharma followed with 1-1.5 per cent losses each.

Nifty maintains consolidation. If Nifty breaks below 8150 mark then we hold 8090-8030 as the next support level. On the contrary for any further upside, Nifty needs to break 8215 on a closing basis. Then we can talk of 8340 as our higher target.

Stocks to watch:

Bajaj Auto: The two wheeler maker, Baja Auto has registered a 9.4 per cent rise in its domestic May sales  to 2.04 lakh units while exports have declined 10 per cent to 1.43 lakh units. Overall company has seen a rise of just 1 per cent from year ago period. The stock has fallen by 1 per cent.

Bank of Maharashtra: The stock of Bank of Maharashtra has risen by 4 per cent after company announced raising its capital up to 1000 crore through either of the right issues, QIP or FPO.

Kajaria Ceramics: The stock hassurged 3 per cent hitting its 52 week high after the company announced that the board would consider stock split in the next board meeting to be held on June 16.

Asian Paints: CLSA has recently downgraded the stock of Asian Paints to high-conviction sell. CLSA felt that the company has become expensive where valuations have been ignoring earning risks.

Rolta India: International rating agencies have lowered credit rating again on the company to 'SD' (selective default) from 'CCC-' after the company failed to pay dues to banks. The stock has tumbled by 5 per cent.