Mid-market commentary Aug 05

Yet again the stock markets have opened on a positive note and this time have sustained the optimism where both Nifty and Sensex traded 1 per cent up. Nifty hit 8650 mark; while Sensex surged above 28000 with 300 points upside amid short covering. European markets edged higher in the opening session itself and the indices traded in the range of 0.35-0.6 per cent gains.

Broader markets are trading in line with the benchmark indices with a positive market bias. All the sectors are trading in green where PSU Banks are leading the move with 2.6 per cent gains. Orient Bank and SBIN have surged 3.3 per cent each.

Amongst the frontliners, Grasim has surged the most with 4.8 per cent gains. Otherwise apart from SBIN; Bajaj Auto, Eicher Motors and Axis Bank are the other top gainers making 3 per cent plus gains. Sun Pharma, Power Grid and Infy are the only stocks that are down, but with marginal losses of below 0.5 per cent.

As stated Nifty has taken a support at 8550 mark and thereby has seen an upward momentum in today’s session. Going forward we hold 8675-8720 as our next resistance levels. In case if Nifty witnesses a turnaround we hold 8590-8550 as the supports followed by the 8475 mark.

Stocks to watch:

Muthoot Finance: According to the media reports the Income Tax department has held a search operation in Muthoot Finance premises for tax evasion and money laundering. The stock may see some downside with the news.

Bharti Airtel: To withstand the competition from upcoming Reliance Jio, Bharti Airtel has recently announced new post-paid plans where it is offering unlimited voice calling with bundled 3G/4G data. The stock will remain in the limelight.

Hindustan Zinc: Vedanta, the 64.92 per cent stake holder in Hindustan Zinc is planning to buy government’s stake. Government currently holds 29.54 per cent stake in the company. The stock is already up 4.7 per cent.

Bharat Forge: The stock has given weak Q1 results but board management remained optimistic about the outlook. The stock remained positive during the session.

Vedanta/SAIL: The steel stocks have surged exceptionally after government has extended Minimum Import Price on 66 steel products for 2 months as against 173 items earlier.