Mid market commentary August 01

Taking a day’s breather Indian markets edged higher again making new 52 week highs. Nifty hit above 8700 mark; while Sensex 28280 levels. Markets could not sustain the highs and retreated again to trade marginally higher with just 0.2 per cent gains. Banks dragged the markets.

Broader markets maintained outperformance against the benchmarks. Midcap segment surged 0.6 per cent driven by 8 and 4 per cent rise in Bajaj Finance and its subsidiary Bajaj Finserv. Smallcap surged marginally up with 0.35 per cent with JMT auto and Rico Auto gaining 17 and 12 per cent respectively. Market breadth remains flat at 1245 advances and 1228 declines.

On sectoral front Auto, Metal, Media and IT surged more than a per cent each. Bank Nifty and Pvt. banks tumbled 0.9 and 0.7 per cent respectively, with ICICI Bank tumbling more than 3 per cent. Infra followed with 0.5 per cent downside.

Nifty top gainers: IT giant TCS  has grabbed the highest position in Nifty with 3 per cent gains. Hindalco, Maruti, Wipro and Power Grid follow with 2 per cent plus gains.

Nifty top losers: Apart from ICICI Bank, L&T and Bank of Baroda have tumbled more than 2 per cent each. Tech Mahindra and Kotak Bank followed with 1.5 per cent downside.

Nifty washed off morning gains as if a shooting star pattern is in the making. If the same is confirmed in the next session we may see some correction where we hold 8570-8470 as the supports provided Nifty falls below 8625 mark. On the contrary if Nifty holds above 8675-8700 then we hold 8750 as the next resistance level.

Stocks to watch:

IL&FS Engineering: The company is said to have signed an agreement with the road ministry for Rs 675 crores for road project in Bihar.

L&T: The construction arm of L&T has won orders worth Rs 1167 crores from Rashtriya Ispat Nigam Ltd., for construction of a second water storage reservoir in the Vishakhapatnam steel plant. The company will remain in the limelight.

Ashok Leyland: Ashok Leyland’s sales data is out and its July 2016 sales have dropped 5 per cent at 10492 units as against 11054 YoY. M & HCV and LCV sales were 8182 and 2310 units.

Colgate-Palmolive: According to the media report the To penetrate more, Colgate-Palmolive the oral care giant is launching an India-focused customised brand, as Patanjali Ayurved threatens to upend the established order in FMCG.