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It is business as usual this morning after the action-packed election result week gone by. The Sensex, which had galloped by 1,127 points last week, has now gained a modest 45 points at 24,171 and the Nifty has complemented the previous week's whooping gains of 344 points with another 10 points at 7214. The Nifty futures are trading at a premium of 26 points at 7248. There is outperformance on the broader market front though; the midcap index is at 7,917, higher by 152 points and the smallcap index is at 8,112, up 224 points. The Bank Nifty has hardened by 1.8% at 15,123.
The markets had started the session on a robust note, with the Sensex touching an intra-day high of 24,427 in early trades,
but have shed most of their gains as weakness in IT and FMCG pack has negated the gains in the banking space. It may be recollected that Sensex and Nifty had crossed the 25,000 and 7,400 levels respectively on May 16 as the BJP vaulted to its highest seat tally ever and the Congress plummeted to its lowest in post-Independent India.
Coal India has raced ahead by 6.6% at Rs 368 to top the gainers list on the BSE. Tata Power has strengthened by 5.9% at Rs 96 and ONGC has gained 3.8% at Rs 399. In the banking space, SBI has gained 3.3% at Rs 2494, HDFC has gained 2.6% at Rs 909 and Axis Bank has gained 2.4% at Rs 1800. Index heavyweight RIL has added 0.6% at Rs 1087.
The public sector undertakings or PSUs are on a roll, extending their past week's rally, after election results suggested the opposition Bharatiya Janata Party (BJP) and its allies won an absolute majority in the recently concluded Lok Sabha polls.
There is well-grounded expectation that the new government will usher in strong pro-reform policies and kick-start the investment cycle.
Coal India, RCF, Power Finance Corporation, Indian Bank, Rural Electrification Corporation, Shipping Corporation of India, Hindustan Copper, BEML, HMT and Dena Bank have rallied 6-11% each, while HPCL, Engineers India, Union Bank of India, BPCL and STC have gained 5% each on the Bombay Stock Exchange (BSE).
The S&P BSE PSU index, the largest gainer among thematic indices, is up 3.77% or 286 points at 7,866, compared to a 0.55% rise in benchmark S&P BSE Sensex at 0945 hours. The PSU index has touched a 52-week high of 7,888 during intra-day trades on BSE.
The information technology (IT) stocks are reeling under pressure this morning, trading lower by up to 5% each on the National Stock Exchange (NSE), after the rupee hits 11 month high against dollar. The CNX IT index has tanked over 4% as the rupee hit a 11-month high. Wipro has shed 5.2% at Rs 476, TCS has lost 4.8% at Rs 2052 and Infosys has weakened by 4.6% at Rs 3030. A firm rupee adversely affects operating profit margins of IT firms as the sector derives a lion's share of revenue from exports.
The midcap IT index is also taking it on the chin, with HCL Technologies, Infotech Enterprises, NIIT Technologies, Mind Tree and Persistent Systems dipping 3% each on the NSE.
The market breadth is strong. Out of 2082 stocks traded on the BSE, there are 1431 advancing stocks as against 571 declines.
