Markets moved higher due to short covering and rally in Larsen & Tourbo, boosted by brokerages upgrades after the engineering conglomerate reported a 17% jump in the net quarterly net profit.
The Nifty index opened in the green, tracking positive Asian peers and crept higher led by gains in frontline stocks Larsen & Tourbo, HDFC, ICICI Bank and HDFC Bank. The index touched a high of 5517 in the afternoon trades, but profit booking seeped in during the last leg of the day after FMCG major ITC reported flattish quarterly earnings. The S&P CNX Nifty closed up 58 points, at 5,486 and the benchmark Sensex ended up 185 points, at 18,326.
Derivative traders said that markets were witnessing short covering after trading in a tight range for the past few sessions. Deepak Singh Tanwar from Sound Equity & Consulting said, “the rally is impressive but the outlook on the index is yet to improve. Nifty has a strong resistance around 5550 and may find it difficult to cross this level. On the down side, weakness will re-emerge below 5450.” High interest rates and raw material prices have dented India Inc.'s fourth quarter performance.
Markets across Asia ended on a mixed note as caution prevailed in Japan over bleak economic outlook and losses in utility shares. Japan's Nikkei Stock Average was down 0.1%. South Korea's Kospi Composite was up 0.4%, Hong Kong's Hang Seng Index was up 0.1%, Taiwan's main index was down 0.5% and the Shanghai Composite index closed flat.
Back in India, Larsen and Tourbo results helped settle the nervousness among investors who had turned to sidelines after the State Bank of India earnings, India’s largest private bank reported 99% drop in fourth quarter profit on Tuesday this week.
L&T, the bellwether engineering firm whose shares were trading sideways for the past few months saw continuous buying interest after the result announcement was made yesterday afternoon. The stock surged over 10% in past two sessions and closed near the day’s high ar Rs 1656. According to reports, Royal Bank of Scotland put a buy rating from hold and Goldman Sachs raised the target price to Rs 2,006 from Rs 1,987.
FMCG major ITC reported results in line with expectations. ITC Q4 standalone net profit stood at Rs 1280 crore, marginallty higher than Rs 1225 crore expected by Reuters poll. The stock closed down 1% at Rs 186.
