09 February 2011

Nifty Above 5300

Equity showed smart recovery from day's low and turned extremely volatile in trade at 10:20 hours. The Nifty bounced back above the 5300 level, which means traders were providing buying support at the same level. They felt that it could be oversold at this level as it has been falling since previous week.

Haresh Shivdasani, managing director and head of equities at HSBC said the key concern for investors right now is near-term headwinds like inflation and interest rates. “We are perhaps somewhere in mid-cycle and typically these are times of caution,” he informed. He said the mood right now is cautiously optimistic.

Foreign institutional investors were net sellers of Rs 726 crore in equities yesterday, as per provisional data. They were net sellers of Rs 6,300 crore in January 2010. Shivdasani said, first half of 2011 will not be easy for inflows. “We will see flows returning in second half of 2011,” he stated.

Oil & gas, private financial, auto, healthcare and infrastucture companies' shares were supporting the markets for recovery. However, selling continued in BHEL, SBI, ITC, DLF, Hindalco, Sterlite, ACC, Wipro, Reliance Communications, Tata Power and Hero Honda, which were limiting the gains.

The 30-share BSE Sensex gained 62 points at 17,838 and the 50-share NSE Nifty rose 20 points to 5,332 on the back of short covering.

Four shares declined as against one share advanced on National Stock Exchange. The broader indices slipped 1-1.5%.

Heavyweight Reliance Industries and ONGC gained 1.7% each. India's second largest lender ICICI Bank jumped 2% and Kotak Mahindra Bank rallied 4%.

M&M shot up 3% ahead of numbers today. L&T, HDFC, HUL and HDFC Bank were up 0.5-1%.

In midcap space, S Kumars Nationwide, Shriram City, UCO Bank, Dish TV India and IRB Infra gained 2-4% while Prakash Industries tanked 20%. Jai Corp, Man Infra, Jyothy Labs and Allcargo Global fell 7-8%.

In smallcap space, Surana Inds, Symphony, Everonn Education, Kirloskar Inds and Zenith Infotech rallied 4-9% whereas MIC Electronics, Allied Digital, INOX Leisure, C & C Construction and Piramal Life lost 7-13%.

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