Power, pharma counters in focus

The stock market has seen a lot of action this week, though the benchmark Bombay Stock Exchange (BSE) Sensex closed with a minor loss, week-on-week.

Business Standard spoke to a few top brokers in the industry, for their views on the week's happenings, with their outlook for the week ahead.

Jitendra Panda, vice-president - retail broking at Motilal Oswal Securities, said, "The put-call ratio touched an all-time high this week indicating that investors were cautious with any further upside. What was also important was that the benchmark BSE Sensex crossed the 200-day moving average of about 5,450 this week decisively, and rose higher to breach the 5,600 levels. One of the main reasons for this was that major action shifted from mid-cap counters to large-cap scrips, which was absent earlier. Stocks like ONGC, ITC, Reliance Industries and Infosys Technologies opened the week with good demand and high volumes."

"Mid-cap counters in sectors such as textile and sugar witnessed profit taking with action shifting to sectors like engineering, cables and power. Major announcements like the Maruti Udyog deal and NTPC initial offer added to the action."

"Short covering in the derivatives market has helped the market sustain these levels albeit with volatility and looking ahead this should continue till the current month's futures expire on next Thursday." "Sectors like power and pharmaceutical should do well but rising international oil prices may play spoilsport again," he added.

Kashyap Pujara, assistant vice-president - portfolio management services, Sushil Finance, said, "After last Friday's close of Nifty at 1734 levels, the week witnessed the Nifty touch a high of 1760 levels. It finally ended the week at 1721 levels, down 13 points. Foreign institutional investors have been big buyers in the Indian market. The news of better advance-tax payments by leading corporates led to fresh buying spout in heavyweights. Mid-caps witnessed considerable action in the last week."

"The pharma sector witnessed healthy buying, with top-tier Indian and multinational pharmaceutical companies outperforming the indices." "The buying in pharma sector was broad-based with the action evident in mid-cap pharma companies as well. The engineering sector also outperformed the markets. Going forward, the under current remains bullish," he said.

"However, the coming week, being futures and options expiry, the markets could take a breather and drift sideways between 1,700 and 1,760 levels on the Nifty."

"Action would be highly stock specific. We expect counters like Mahindra and Mahindra and Oriental Bank of Commerce to rally ahead of their futures and options expiry. The power sector will remain buoyant on the run up to the NTPC issue," he added.

Gurunath Mudlapur, head - research, Khandwala Securities said, "We started seeing profit booking this week as valuations were stretched. International crude prices were also higher, nearing the $50-mark, which added to the selling pressure. In fact, after the recent rally, a correction on account of profit booking was very much in the offing."

"We witnessed churning in the market, specially in sectors like banking, cement and textiles. There was action in mid-cap counters on account of this churning. Despite the correction, the market sentiment remained positive with healthy institutional inflows. Looking ahead, the market should continue to consolidate at these levels and see some more profit taking. We are positive on the steel and oil and gas sectors doing well from here with money chasing lower valuation scrips with room for an upside."

"A note of caution is the high inflation and rising crude oil prices which do not augur well for the Indian economy unless the gross domestic product growth improves to adjust for the inflation," he added.