Weekly roundup: Stock specific moves push Sensex up for 5th straight week

The market ended postive thanks to a smart rally in TCS, HDFC Bank, Axis Bank and RIL

It was a week of stock specific moves. The market ended positive for the fifth consecutive week thanks to a smart rally in stocks like TCS, HDFC Bank, Axis Bank and Reliance Industries in an otherwise a holiday-truncated expiry week. Globally, low probability of US Federal Reserve hiking interest rates in US in its March policy meeting also contributed to the buoyant sentiment. 

During the week ended February 23, the S&P BSE Sensex added 1.5% or 424 points to settle at 28893, while Nifty50 gained 1.3% or 118 points to close at 8939. 

Midcap and Smallcap stocks also mirrored the gains in the frontline indices to rise nearly 1% each. 

“For the forthcoming week, we expect an immediate range of 8,982-8,826 for the Nifty. In case of a dip towards the lower end of the range, traders are advised to initiate long positions for the targets beyond the 9,000 mark. We would reiterate that the trend is strong and hence, look to ride the tide instead of wasting too much time on getting worried of an overbought condition of the market,” said brokerage Angel Broking in a technical note. 

Sectors and stocks

Sectorally, all but BSE Power index (down 0.6%) closed higher. 

BSE Oil & Gas index surged 3%, followed by the BSE Metal index (up 2.2%), and the BSE Consumer Durables index (up 2.1%). The BSE Bankex and Realty gained 1.6% each while, BSE IT rallied 1.4%.

BSE Telecom index (up 1.4%) hogged the limelight. With Reliance Jio unleashing a price war by announcing this week to end its free offers by March, the consolidation in the telecom sector gathered pace.  Country’s largest telecom operator Bharti Airtel on Friday announced to acquire Telenor India. The move comes ahead of the likely Vodafone- Idea merger. 

Among individual stocks, Reliance Industries, Axis Bank, HDFC Bank and Asian Paints advanced 11%, 7% and 5% and 4%, respectively. Sun Pharma also added 4%, while Tata Motors, Tata Steel and Coal India jumped 3% each.

Losers included NTPC (down 3%), Dr Reddy’s (down 1%) and Power Grid (down 0.8%) and M&M (down 0.6%).

Feb F&O expiry 

The February series of derivative contracts witnessed higher rollover of 71% as compared to three-month average of 65%, while market wide rollovers were slightly lower at 79% as compared to three-month average of 81%. Overall, derivative data indicated long rollovers.

BofA ML sees near-term time correction

The ongoing rally has once again sent Indian markets into expensive territory and there could be a near-term pullback or time correction, said the brokerage Bank of America-Merrill Lynch (BofA-ML). Market may have gained nearly 8% year-to-date, the headwinds on earnings front owing to residual overhang of demonetisation and deferral of GST implementation to July from April may keep the investors on edge, it added. CLICK HERE FOR FULL REPORT

Minutes of US Fed meet

The minutes of the last Federal Open Market Committee meeting revealed that the Fed officials are divided with respect to interest rate increase. Some officials need some more clarity and have concerns about downside risks to growth while others are confident of the growth. 

“As of now probability of a hike in interest rate by Fed in the next meeting scheduled on 14th -15th March looks evenly balanced. Also another round of economic data pertaining to employment, inflation and spending which will be released before meeting may act as a catalyst in decision making,” said brokerage SMC Global.

MARKET NEXT WEEK: Global cues will direct the market next week with US president Donald Trump likely to be announcing his tax plans. 

“US market has been rallying well in expectation of cut in corporate tax from 35% presently. This is an unknown risk if the reform is below expectation,” said Vinod Nair, Head of Research, Geojit Financial Services.

Q4 GDP data of India, and US due on February 28 and Manufacturing PMI of China will also be eyed.