Bulls push Nifty above 11,900; all eyes on Budget now

Indian markets edged higher on July 2 for the second consecutive day in a row led by stable global cues. Sensex rallied over 100 points while Nifty closed above 11,900 for the first time since June 13.

The final tally on D-Street – Sensex rose 129 points to 39,816 while Nifty closed 44 points higher at 11,910.

In terms of sectors, the S&P BSE oil & gas index rose 1.1 percent, followed by the S&P BSE Infotech index that was up 0.84 percent, and the BSE Power index that gained 0.8 percent.

Amongst the broader market indices, BSE Midcap gained in line with the benchmark, while BSE Smallcap closed on a flat note. Nifty Bank closed lower by 0.28 percent, dragged down by losses in YES Bank, IndusInd Bank, Axis Bank and Kotak Bank.

In the near-term, volatility is likely to remain high as we step closer to the Budget 2019, and as long as Nifty holds above 11800-11850, bulls are likely to remain in the driver’s seat, suggest experts.

“In the near term, volatility is likely to remain high and hence we maintain our cautious stance on the markets at higher levels. The upcoming Union Budget (scheduled on July 5) is likely to provide further direction to the markets in the coming sessions,” Jayant Manglik, President – Retail Distribution, Religare Broking Ltd told .

“Globally, while the temporary trade truce between the US and China is a positive development, the recently escalated tensions between the US and Iran could continue to induce high volatility across indices. Further, market participants would closely monitor the monsoon progress, movement of crude oil prices and currency fluctuations,” he said.

Technically, Nifty formed a bullish candle for the second day in a row. The index now trades above crucial short term moving averages, which is a positive sign for the bulls. However, a negative advance-decline ratio might be a cause of worry for some.

Stocks in News

Yes Bank shares ended with losses of over 8 percent on July 2 after a media report indicated that Mumbai-based borrower Radius Developers defaulted on interest payment to private sector lender. However, Radius Developers denied the report.

Tata Motors ended with loses of over 2 percent after subdued sales performance in June 2019. The company said its commercial and passenger vehicles business sales in the domestic market witnessed a drop of 14 percent at 49,073 units in June 2019 on continued subdued demand.

Cox & Kings shares closed close to 5 percent lower on July 2 after rating agencies assigned default rating for its commercial paper. CARE downgraded credit rating to D from A+ for company’s commercial paper of Rs 375 crore while Brickwork also downgraded credit rating to D from A1+ for the commercial paper issue of Rs 1,685 crore due to delay in servicing of obligations.

Strides Pharma Science shares fell 3.5 percent on July 2 after the US health regulator classified the company’s Puducherry facility as Official Action Indicated (OAI).

Alembic Pharmaceuticals shares ended with gains of nearly 5 percent on July 2 as the US health regulator approved Febuxostat tablets that lower uric acid levels.

Global Update

Stocks in Asia mostly ended higher, as the Reserve Bank of Australia (RBA) slashed its cash rate to a new all-time low. The Shanghai Composite ended flat at 3,043.94.

Hang Seng jumped 1.26 percent while Nikkei added 0.11 percent to close at 21,754.27. The Topix rose 0.31 percent to finish its trading day at 1,589.84. Kospi slipped 0.36 percent and closed at 2,122.02.

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