Mid market commentary June 23

Indian markets remain aimless ahead of to be or not to be of the Brexit referendum which will be announced Friday, early in the morning. The voting has begun today. Nifty opened above 8200 and is hovering around the said levels; while SENSEX too remains flat at 26750 levels. Markets lack anticipation for now.

Broader markets are flat too, but slightly underperform the benchmark indices. Midcap is 0.07 per cent up and Smallcap is 0.14 per cent down. The market breadth is reasonably negative with 914 advances and 1391 declines.

Indian monsoon is expected to be above normal this year which may boost the markets in coming sessions. Moreover, the report from the high-tech monsoon experiment carried out in the Bay of Bengal with the British scientists to forecast the arrival and intensity is on its way.

On the sectoral front Realty sector remains down with 1 per cent losses with Unitech and HDIL falling below 2 and 3 per cent respectively amid profit booking for the straight second session. On the contrary PSU banks surged 1 per cent plus ahead of the merger news of consolidating 26 PSU banks into 6 major ones. IT sector remains volatile ahead of BREXIT. Amongst the frontliners, TCS remains down while others see recovery.

Top Nifty gainers: Ambuja Cements grabs the highest position with nearly 2 per cent gains. Sun Pharma follows with 1.8 per cent gains. Tata Motors sees short covering with 1.7 per cent gains. Dr. Reddy's continues the upbeat and gains 1.5 per cent gains. Yes Bank is the fifth top gainer with 1.4 per cent gains.

Top Nifty losers: Infratel continues with the downturn and drops 4 per cent. The power majors NTPC and Tata Power too see a continued downbeat with 3 per cent and 1.6 per cent drops. ONGC and TCS too follow with 1 per cent and more losses.

Nifty sees a slight rebound after recovery in the previous session. We maintain 8260-8300 as the immediate resistances followed by 8360 as the next upside target. On the downside, 8150 followed by 8075-8065 will act as the supports provided Nifty falls below 8180 mark.

Stocks to watch:

TCS: Bajaj Finance said it will be using the CHROMA, TCS’s cloud based HR solution to enhance the new generation HR and can automate talent management processes. On the contrary if TCS reacts ahead of BREXIT, it  will lead to volatility in the stock.

Reliance Communications: After falling for more than 1.5 per cent in the previous session amid failing in the TRAI call drop test, Reliance Communications recovers in Thursday’s session on the revised ICRA outlook to stable from negative.

Reliance Power: Reliance Power tumbled on receiving a show-cause notice for Kerendari coal block regarding the termination of PPA (Power Purchase Agreement) for Tilaiya UMPP (Ultra Mega Power Project) in April 2015 by the Coal Ministry. It is a 3960 MW power project.

Jain Irrigation: Morgan Stanley, the rating agency upgrades rating to overweight from Equal weight on expectation of better monsoon and increasing state and central Government thrust on micro irrigation systems. Stock surged 7 per cent.

Biocon: The Biopharma giant, Biocon said that it has received nod from Drug Controller General of India to partner with Quark Pharmaceuticals and proceed with clinical trials on human subjects for a new drug candidate.