Mid market commentary June 16

Indian stock markets offset the prior session’s energetic rise that seemed to be a fresh buying trend after a pullback. Both Nifty and Sensex retreated after a gap filling in the previous session. Broader markets followed suit amid profit booking, noticeable mainly in the sugar stocks. Market bias remained negative with 613 advances.

On the global front FED kept the rates unchanged showing concerns over the BREXIT where the leave campaign remains dominant according to the poll. Asian markets edged lower after yen surged against Dollar when BOJ too dropped the idea of monetary easing. Following in the footsteps Europe opened sharply lower. Oil prices too dropped with lower than expected draw on US inventory.

On the domestic front all the sectors are trading in red while India volatility Index (VIX) stands at 7 per cent. Metal and PSU banks are less damaged than others and remain marginally down with 0.3-0.6 per cent losses.

Nifty top gainers: Hindalco and Gail stand apart and surged 1 per cent each. Asian Paints, Eicher Motors and Wipro follow the toppers list but with minimal gains of 0.35-0.65.

Nifty top losers: Infratel, Maruti Suzuki, IndusInd Bank and Ultratech Cements dragged the markets down, tumbling more than 2 per cent each. ZEEL follows with 1.9 per cent losses.

Nifty filled the gap and turned back to trade lower. Nifty has broken our immediate supports at 8150-8130 and now we hold 8065 followed by 7990 as the next supports in case of any further downside. For recovery, Nifty needs to break out of 8150, then the next target would be 8180-8215.

Stocks to watch:

Crompton greaves: The shares of Crompton Greaves surged against the markets after media reports suggested that company was likely to sell its global automation subsidiary to earn 754 crore.

Tata Power: Following the share purchase agreement with Welspun Renewables, Moody’s revised Tata Power’s rating to negative from stable. According to Moody’s the acquisition was of a debt fund nature and the terms of debt were not disclosed.