WPI eases to 2-year low; Infosys Q1 results lift sentiments

After falling for about 2 percent for the week ended July 12, Indian markets witnessed a bounce back on July 15 with Sensex registering a rally of more than 160 points while Nifty having a touch-and-go moment with 11,600.

The final tally on D-Street – Sensex rose 160 points to 38,896 while Nifty ended 35 points higher at 11,588. The index reclaimed 11,600 in intraday trade but selling pressure at higher levels pulled the index lower.

In terms of sectors, the S&P BSE IT index rose 3.5 percent thanks to 7 percent rally in Infosys, followed by the S&P BSE Healthcare index that was up 0.7 percent, and the S&P BSE Auto index that rose 0.29 percent.

The broader market underperformed – the S&P BSE Midcap index slipped 0.6 percent while the S&P BSE Smallcap index was down 0.63 percent.

WPI inflation data added some tailwind for Indian markets as wholesale price-based inflation declined for the second consecutive month to its 23-month low of 2.02 percent in June.

“Liquidity issue in the domestic market and weak economic data in China put pressure on the market. Green shoots from earnings lifted the sentiment of IT sector while the ease in WPI inflation (June) to 2.02 percent cheered market,” Vinod Nair, Head of Research, Geojit Financial Services Ltd said.

But, for the week, in the absence of any major triggers in the near term direction of the markets will be charted by earnings. The index is finding it difficult to close above 11,600 that will continue to remain as a key hurdle for the index.

In terms of technicals, Nifty closed higher but witnessed selling pressure at higher levels. Hence, it would be prudent for traders to maintain a sell-on-rise approach.

“With no major event ahead, we feel earnings, the progress of monsoon and global cues would dictate the trend ahead. We reiterate our bearish view on Nifty and suggest continuing with “sell-on-rise” approach,” Ajit Mishra Vice President, Research, Religare Broking Ltd told Moneycontrol.

“Stocks, on the other hand, may continue to witness volatile swings across the board thus we suggest keeping extra caution in terms of stock selection and trade management. On the sectoral front, banking and FMCG could lead the fall,” he said.

Top Sensex gainers include companies like Infosys, Sun Pharma, Maruti Suzuki, and TCS while IndusInd Bank, L&T, Bharti Airtel and ITC witnessed selling pressure.

Stocks in News:

Infosys closed with gains of over 7 percent after global brokerage firms maintained their rating but raised 12-month target price post June quarter results.

Dewan Housing Finance Corporation shares crashed and ended nearly 30 percent lower to hit a 10-year low on July 15 after posting a loss for the first time since inception and warning about its survival.

Shares of public sector lender Allahabad Bank ended with losses of over 7 percent on July 15 after the company reported a fraud of Rs 1,775 crore by Bhushan Power & Steel.

Future Enterprises shares fell 5 percent after the Directorate of Revenue Intelligence arrested the company’s chief financial officer Dinesh Maheshwari for allegedly evading customs duty worth Rs 14.58 crore.

Global Update:

Chinese stocks recovered from early slip to finish higher on July 15. The Shanghai Composite added 0.4 percent to 2,942.19, while the Shenzhen component rose 1.04 percent to 9,309.42. The Shenzhen composite also gained 1 percent to 1,572.34.

Hang Seng index added 0.22 percent while Kospi ended the trading day 0.2 percent lower at 2,082.48. The S&P/ASX 200 declined 0.65 percent to close at 6,653.00 and MSCI Asia ex-Japan index rose 0.28 percent.