Mid-market commentary July 14

Stock markets witnessed a prolonged breather where the benchmark indices remained range-bound until the afternoon trade when the WPI data was out. Country posted WPI data that stands at 1.62 per cent in June as against 0.79 per cent in the previous month and -2.13 per cent YOY. Markets witnessed a sharp recovery thereafter.

Broader markets recovered and outperformed the benchmarks. Midcap and Smallcap indices traded 0.2 and 0.6 per cent up respectively. The market breadth remained positive with 1426 advances and 951 declines.

The downgrade in oil market from the International Energy Agency with the persistent glut is refraining Crude prices from rising further despite of growing demand and decline in OPEC-production. Crude prices witnessed some short covering in Thursday’s trade but are likely to fall again. The exploration companies will witness correction in near term.

Considering other sectors, PSU Banks accelerated, with index gaining 1.9 per cent. PNB and Canara Bank surged more than 4 per cent each.  The lowest gainer was SBIN with 1 per cent up move. PSU banks have been rising since RBI announced “sustainable structuring of stressed assets”. Pharma is the only sector trading in negative which is marginally down 0.4 per cent dragged down by Sun Pharma that tumbled 1.1 per cent.

Nifty top gainers: Bank of Baroda surged 2 per cent and grabbed top position in Nifty50. Ultratech Cements, Maruti, Grasim and Power Grid followed with 1.5 per cent plus gains.

Nifty top losers: ONGC retreated from Wednesday’s rise to trade below 1.7 per cent amid profit booking. M&M and Sun Pharma too fell more than 1 per cent. Dr. Reddy's and Infy followed with 0.9 and 0.7 per cent downside respectively.

Asian markets were a mixed bag, where traders remained cautious ahead of China’s GDP data and Bank of England’s policy meeting on interest rate decision. Nikkei 225 was the top gainer with 0.95 per cent gains. US markets too ended marginally higher but broke record highs yet again.

Nifty is seen recovering post a day’s breather. If Nifty surges above 8550 mark then we hold our next upside target at 8600-8620 levels. On the contrary any retreat hereafter may drag Nifty up to 8475 followed by 8400 mark, provided it falls below 8500 on closing basis.

Stocks to watch:

Wockhardt Pharma: Wockhardt has sought shareholders’ approval to raise 1200 crore rupees through non-convertible debentures on private placement basis to repay its debt.

Titan/Rajesh Exports: The jewellery stocks like Titan and Rajesh Exports saw hike in stock prices after government announced relief measures on gold, specifically exceeding limit from Rs 12 crore to Rs 15 crore to relax the impact of excise duty it levied during Budget 2016. 

NALCO: The National Aluminium company bagged Pottangi Bauxite Mines in Koraput district of Odisha with 22.75 tonne aluminium refinery. The stock was 4 per cent up after the announcement.

L&T: L&T’s arm L&T Infotech’s Rs 1243 crore IPO got oversubscribed by 11.67 times where the applications crossed 1 million. L&T is likely to remain in the limelight for few sessions.

Dishman Pharma: Dishman Pharma got USFDA approval for capacity expansion of Bavla plant which was under inspection. The stock may rise with the news.