Markets end on a flat note

The markets today moved in an extremely narrow band, before settling with marginal gains. However, analysts are hopeful of the Nifty crossing the 5500 mark in August.

The NSE Nifty today touched a low of 5382 in late morning trades owing to weakness in key heavyweights like SBI, ONGC and Infosys. However, the index thereafter recovered its losses and rebounded into green led by gains in HDFC, ABB and ICICI Bank.

The Nifty spurted to a high of 5416, and finally ended with a marginal gain of 11 points at 5409.

Market range is gradually rising, and Nifty will be in a slightly wider range of 5200-5500, says Hormuz Maloo, technical analyst, Geojit BNP Paribas Financial Services. He adds that, there is a possibility of 100-150 points upside on the Nifty. The index can break out and rise up to 5550, and then may again come down slightly.

The Sensex touched a low of 17,903, later rebounded and touched a high of 18,013. The index finally settled with a gain of 35 points at 17,992.

HDFC was the major gainer today, the stock surged 3% to Rs 2,983.

Tata Motors and ICICI Bank rallied nearly 2% each to Rs 868 and Rs 926, respectively.

Hindustan Unilever and Sterlite advanced 1.7% each to Rs 257 and Rs 179, respectively. Hindalco added 1.5% to Rs 160.

On the other hand, Reliance Communications dropped 2% to Rs 182. Bharti Airtel dropped 1.5% to Rs 316.

Jindal Steel, Cipla, ONGC and Reliance Infra were down over 1% each.

Reliance declined 1% to Rs 1,010. Hormuz Maloo expects Reliance to drop further down to Rs 960 levels.

The BSE PSU index was up 1.6% at 9613, and the Bankex gained nearly 1% at 11,556.

MMTC which traded ex-bonus-cum-split today soared nearly 22% to Rs 1,839 of the adjusted price.

Most of the other gainers were from the mid-cap banking space. Oriental Bank of Commerce soared 6% to Rs 379. Bank of Baroda, Allahabad Bank, UCO Bank, Bank of India, Andhra Bank, Dena Bank, Syndicate Bank and Vijaya Bank ended with significant gains.

Derivatives analyst Ashish Chaturmohta, sees strong buildup of positions for midcap banks such as Indian Overseas Bank, Band of India, Bank of Baroda, IFCI. The strong open interest built up suggests 10-12% upside from current levels.

DERIVATIVES ACTION

The Nifty July futures settled at 5409, while the August futures ended with a premium of 15 points to the spot. Nifty rollovers were slightly higher than last month, along with index heavyweight Reliance in the range of 70%- 75%, says Ashish Chaturmohta, AVP - Derivative Analyst, Anand Rathi Securities

He further adds that, it is quite likely that the Nifty breaks out of the trading range, more so if it is able to sustain above 5380.

Among the Nifty options, Nifty 5500 August call has an open interest (OI) of 5.6 million shares, while 5600 call has a built up of 5.7 million shares. On the other hand, 5400 August Put OI stands at 4.68 million shares followed by 5300 Put OI stands at 6.7 million.

Reliance, ICICI Bank, Tata Motors, IFCI and SBI were the top traded counters in the derivatives segment today.

Talking about heavyweights, HDFC Bank, Infosys, Tata Motors, Cairn, Power Grid and ITC are likely to trade with a positive bias. Rollover and cost of carry suggest 5-8% upside in next 10-15 trading sessions.