Mid market commentary July 8

Indian stock markets continue with the sell-off in Friday’s trade where both Nifty and Sensex are marginally down with 0.3 per cent losses. It’s a gradual slowdown and hence whether it’s a profit booking or sell-off pressure is the matter of concern. Banking sector specifically PSU banks are dragging the benchmark indices downwards.

Asian markets remained cautious ahead of the US jobs data and overnight plunge in oil prices. Nikkei 225 is down by 1 per cent and Hang Seng remains down 0.9 per cent. Europe too opened on a negative note.

Market bias too turned negative with 890 advances and 1361 declines. Smallcap tumbles in line with the benchmark indices. Midcap remains flat to negative. Midcap stock JP Associates has dragged the Midcap index by falling more than 6 per cent amid profit booking.

Among the sectors, Media and Auto maintained upside with marginal gains against the markets. Media surged after the news that government planned increasing FDI limit in the print media sector. Auto surged with Tata Motors gaining more than 2 per cent in the early trade. Tata Motors surged after JLR posted a rise in June sales. PSU Banks, Realty and Infra are down with 1 per cent and more losses.

Nifty top gainers: Apart from Tata Motors, Asian Paints and Auro Pharma grabbed the top gainers’ position and surged 1.9 per cent. Hero Motocorp and ZEEL follow with 1.3-1.4 per cent gains.

Nifty top losers: IDEA falls the most with 3 per cent losses. Shares of Telecom operators fell sharply after Congress party alleged Rs 45000 crore telecom scam. Bharti Airtel and Infratel too fell more than 2 per cent. Others are BHEL and Bank of Baroda that too lost 2 per cent and more.

Nifty is correcting but at a slower pace. We still maintain our view of 8295-8285 as immediate supports. 8245-8250 will act as further support levels. 8325-8355 will act as immediate resistances followed by 8400 mark.

Stocks to watch:

JSW Steel: The company has posted its highest ever quarterly crude steel production of 3.87 million tonne in Q1FY17 as against 3.40 million tonne in the corresponding period of the previous year.

DLF: According to media reports DLF has shortlisted potential buyers for the 40 per cent promoters’ stake in the company in its rental arm DLF Cyber City Developers for Rs 13000 crores.

Aurobindo Pharma: Auro Pharma joins the series of USFDA approvals. IT has recently received USFDA nod for its generic Methanamine Hippurate.

Srei Infrastructure Finance: Brickwork rating agency upgraded Srei to AA+ with stable outlook, from AA for its non-convertible debentures of Rs 4500 crores.

8K Miles Software Services: The stock surged more than 10 per cent after company posted its Q1FY17 results where it posted revenues and net profits at Rs 104 crores and Rs 19.3 crores.