Mid market commentary June 14

Indian stock markets opened on a positive note but saw a retreat in the morning tick itself, to trade on a flat to negative note. Nifty has hit below 8100 mark; while SENSEX is trading flat at 26400. Currently the benchmark indices stand lull. However, the market bias remains reasonably positive with 1455 advances and 793 declines.

Smallcap and Midcap indices outshine with 0.7 per cent and 0.22 per cent gains, respectively. Smallcap index has been pulled up by Alok Textiles and Bhushan Steel surging more than 13 per cent each. Jaiprakash Associates has surged 11.7 per cent and directs the Midcap index to head upwards.

All the above mentioned stocks are up in Tuesday’s trade after RBI announced a new scheme to restructure corporate debt which will benefit these companies with unsustainable debt. Banks would segregate sustainable and unsustainable debt portions of a firm and convert the sustainable levels of debt into equity or quasi equity instruments.

On the global front all the investors are wary ahead of the two day FOMC meeting which will start tonight. The coming meet would be dovish but all eyes are on the forecasts for the next meet and current economic view. Asian markets also remain cautious ahead of the Brexit poll. Nikkei 225 continued to fall and saw a downside of nearly 1 per cent. Hang Seng is marginally down by 0.6 per cent.

On the domestic front, May CPI was released yesterday after market hours which stands at 21 month high of 5.76 per cent wherein food inflation came in at 7.55 per cent. Today, May WPI data was released and WPI stands at 0.79 per cent as against 0.34 per cent in April. This is the second straight month of rise after 15 consecutive monthly declines. We may not see RBI cutting interest rates in near future.

On the sectoral front, PSU Bank has surged the most with 2.2 per cent gains where PNB has surged more than 4 per cent. Realty sector too stood strong, outperforming the markets at 1.5 per cent gains. Both the sectors recovered from losses made in the previous session. On the contrary Media has tumbled 0.7 per cent with ZEEL tumbling nearly 2.3 per cent. IT too trades down with 0.6 per cent losses.

The tea sector stocks have also surged with Assam tea prices hitting a record high price of Rs 501/kg. The said optimism is likely to continue till October which is the peak production period, eventually  increasing the margins.

Top Nifty gainers: Adani Ports and SBI are the top gainers with 2.5 and 2.2 per cent gains, respectively. Cipla, BOB and Tata Motors follow with 1 per cent plus gains each.

Top Nifty losers: Apart from ZEEL, Ultratech Cements, BPCL, Asian Paints and Ambuja Cements are the top losers with more than 1 per cent losses.

Nifty is trading range bound. In case of any upside, we may see Nifty hitting 8150 followed by 8180 mark provided Nifty hits 8110 on an intraday basis. On the contrary 8090 will act as the support followed by 8065 mark.

Stocks to watch:

Ramco Systems: Ramco Systems, IT consulting and Software company has surged after it put Makemytrip's managed payroll operations on live mode

Ajanta Pharma: Ajanta Pharma today launched anti-dementia Memantine Hydrochloride tablets in the US market through its wholly-owned subsidiary Ajanta Pharma USA Inc. The stock is likely to remain in the limelight.

IVRCL Infra: IVRCL Infra jumped 9 per cent after it announced allotment of 6.46 lakh shares to Bank of Nova Scotia for strategic debt restructuring (SDR).

KPIT Technologies: KPIT Technologies slumped nearly 9 per cent after it issued clarification on its legal dispute with its prior US based client.

Deepak Fertilizers: The stock has surged 7 per cent after the Ministry of Chemicals and Fertilisers gave a green signal to release nearly Rs 485 crore outstanding subsidy payment to the company.