Nifty gains for third straight day but fails to hold 11,700

Indian equity market witnessed third straight day of gains on July 17 that pushed Nifty above 11,700 intraday and Sensex by over 150 points but selling pressure at higher levels capped the upside.

The final tally on D-St – Sensex rose 84 points to 39,215 and Nifty closed 24 points higher at 11,687.

In terms of sectors, the BSE IT index remained the outperformer for the second consecutive day in a row, followed by the S&P BSE FMCG index, and the Bankex. Selling pressure was seen in the auto, oil & gas, and telecom space.

The broader market underperformed – the S&P BSE Midcap index fell 0.15 percent while the S&P BSE Smallcap index closed with a marginal loss of 0.7 percent.

Markets will react to Wipro, and Yes Bank results on July 18 that came post market hours. Wipro reported 3.86 percent sequential fall in Q1 consolidated profit and 2.4 percent decline in revenue from operations on July 17.

YES Bank turns black in Q1 as it reported a net profit of Rs 113 cr which was slightly lower than CNBC-TV18 poll of Rs 149 crore. The net interest income was also less than estimates. NII stood at Rs 2,281 crore compared to CNBC-TV18 poll of Rs 2,482 crore.

“Market was rangebound but Bank Nifty outperformed in expectation of transfer of RBI reserve to the government. Q1FY20 is unlikely to cheer investors due to the risk of a downgrade in FY20 earnings given muted expectation,” Vinod Nair, Head of Research, Geojit Financial Services Ltd told Moneycontrol.

“Finance and cement sectors are expected to be strong performers, while auto, metal and oil & gas sectors are likely to underperform due to weak consumer demand, lower realisations and slowdown in the global economy,” he said.

In terms of technicals, Nifty formed a bullish candle on the daily charts, but it moved in a narrow range for the most part of the trading session. Important support for the index is placed at 11,600, and then towards 11,550.

Stocks in news:

Shares of Multi Commodity Exchange of India ended 5 percent higher on July 17 after reporting steady growth in June quarter earnings, driven by better revenue and operating income.

DCB Bank shares plunged 16 percent after the lender reported a dismal set of earnings for the quarter ended June 2019. Profit during the quarter grew 17 percent to Rs 81.1 crore and net interest income increased 11.7 percent to Rs 304.8 crore compared to year-ago period.

Yes Bank shares ended 5 percent lower on caution ahead of June quarter earnings.

Strides Pharma Science shares fell over 3 percent after the US drug regulator found its Puducherry plant in violation of good manufacturing practice regulations.

Shares of Suzlon Energy closed with losses of over 4 percent after the company failed to furnish the principal amount on the outstanding bonds worth $ 172 million.

Global Update:

Stocks in Asia ended mostly lower following overnight developments on the US-China trade front. The Shanghai composite closed 0.2 percent lower at 2,931.69, while the Shenzhen component added 0.2 percent at 9,302.00. The Shenzhen composite also rose 0.162 percent to close at 1,574.35. Hang Seng index slipped 0.18 percent.

Nikkei fell 0.31 percent to close at 21,469.18 while the Topix ended its trading day slightly lower at 1,567.41. Kospi declined 0.91 percent to close at 2,072.92 while Australia’s S&P/ASX 200 rose 0.49 percent to finish its trading day at 6,673.30.