Markets continue momentum; Sensex hovers at 27,500

Heavyweights such as ONGC, Bajaj Auto, ITC and Infosys are attracting buying interest this morning.

The markets have surged this morning, led by gains in index heavyweights such as ONGC, Bajaj Auto, ITC and Infosys.

At 10:40am, the Sensex was at its day's high at 27,512, up 186 points and the Nifty was comfortably above the 8,300 mark at 8,319, up 57 points. This also happens to be the highest level since May 12 this year.

The broader markets are also going strong, with the midcap and smallcap indices gaining nearly 1% each at 10,642 and 11,131 respectively.

Among key results, Asian Paints, Tata Power, Tata Steel, Bajaj Auto, Coal India, ITC and State Bank of India (SBI) are some of the companies that will announce their quarterly results this week.

EXPERT’S VIEW

Going ahead, remaining quarterly results, distribution of monsoon and pick-up in investment activity, if any, will dictate market sentiment and so will expectations of a US rate hike, analysts say.

“While the market has shown signs of stability on week-on-week basis, even as the intra-week volatility has been exceptionally high, it is yet early to assume that the short-term trend for the market has reversed for good. Thus, traders should continue to exercise caution and adopt disciplined trading actions. As for investors, there are stocks available across sectors at attractive medium-to-long-term valuation, which should be accumulated,” said Hitesh Agrawal, head research, at Reliance Securities in a note.

Technical chartists suggest that 8,360 barrier for the Nifty continues to appear stiff, which could mean that despite oscillators’ position being accommodative towards an upswing, the potential for a break past this barrier looks limited. Sustained inability to clear 8,360 would also suggest that the 7,800 could drag indices lower.

"Going forward, we maintain our higher degree negative stance on the market and expect the Nifty to face strong resistance around the 8350 - 8400 levels. Thus, traders should remain light on positions in the ongoing bounce and should look for a shorting opportunity if and when the Nifty reaches the above mentioned resistance zone," points out a morning note from Angel Broking.

"On the flipside, the immediate support for the index is seen around 8100 - 8000 levels. However, sooner or later, we expect the Nifty to slide below this support zone. It's advisable to trade cautiously in the market and we suggest avoiding trading aggressively in the opposite direction of the higher degree (down) trend," it adds.

RUPEE

The rupee appreciated by another 4 paise to 63.47 against the US dollar in the early trade today, extending its winning streak for the fourth day on continued selling of the American currency by exporters.

Forex dealers said that apart from sustained selling of the dollar by exporters, the dollar's weakness against other currencies overseas backed up the rupee at the Interbank Foreign Exchange.

SECTORS AND STOCKS

All the BSE sectoral indices are in the green; with oil, pharma and banking stocks hogging the limelight this morning.

The oil marketing companies such as Bharat Petroleum Corporation (BPCL), Indian Oil Corporation (IOC) and Hindustan Petroleum Corporation (HPCL) were trading higher by 2%-3% each on the back of fuel price hike. These three companies announced a Rs 3.13-a-litre increase in the retail price of petrol and Rs 2.71-a-litre rise in diesel prices with effect from Friday midnight to align the de-regulated domestic prices with the international rates. And index bellweather RIL has gained half a percent at Rs 879.

In the pharma space, Lupin, Dr Reddy's and Sun Pharma have added about 1% each.

In the banking space, ICICI Bank, HDFC Bank and SBI have added half a percent to 1% each; Yes Bank, Bank of Baroda and IndusInd Bank are also the other major gainers in the banking space.

Among the index heavyweights, ONGC, Bajaj Auto, ITC, Infosys and Hindalco have added between 1% to 2% each to emerge among the leading gainers on the BSE.

Jain Irrigation Systems has soared 16% to Rs 65.75 on the NSE after reporting consolidated net profit of Rs 98.5 crore for the quarter ended March 2015 (Q4) against Rs 75.3 crore in the year ago quarter.

Jammu & Kashmir (J&K) Bank has, however, dipped 5% to Rs 98.40 on the National Stock Exchange (NSE) in early morning trades after the bank reported a sharp 60% year-on-year decline in net profit at Rs 102 crore for the quarter ended March, 2015 (Q4).

The market breadth is strong. Out of 2,070 stocks traded on the BSE, there are 1,394 advancing stocks as against 602 declines.