Taking Stock: First hint of consolidation but bulls help Nifty climb above 12,300

Indian market witnessed a kneejerk reaction on January 15 tracking muted global cues, but bulls managed to push Nifty50 back above 12,300 levels late in the afternoon session.

World stocks eased off record highs on Wednesday and the US and German bond yields slipped as euphoria over a Sino-US trade deal was depleted by US Treasury Secretary Steven Mnuchin who said tariffs on Chinese goods would remain in place, for now, Reuters reported.

Back home, the S&P BSE Sensex recouped losses after falling over 300 points while Nifty50 bounced back after testing 5-Days EMA placed at 12,296.

Let’s look at the final tally on D-Street – the S&P BSE Sensex fell 79 points to 41,872 while the Nifty50 closed with loss of 19 points at 12,343.

Sectorally, the action was seen in realty, consumer durables, infrastructure, consumer discretionary, and metal indices. Profit-taking was visible in banks, energy, telecom, and finance stocks.

The broader market outperformed as the S&P BSE Smallcap index rose over 1 percent while the S&P BSE Midcap index closed with gains of 0.6 percent.

More than 100 stocks on the BSE hit a fresh 52-week high. These include SRF, Alkem Laboratories, L&T Infotech, PVR, Asian Paints, NIIT Tech, among others.

Higher NPA numbers reported by some banks tapered risk appetite of investors to some extent, suggest experts. All eyes are now on Budget which will dictate the near term trend for Indian markets.

“After the solid pre-budget rally, the market is getting a bit sceptical post higher than expected NPA numbers in the recent Q3 results of banks and very high consumer inflation which may stay for another month or two,” Vinod Nair, Head of Research, Geojit Financial Services Ltd told .

“Market would watch the Q3 results & actual budget, for further direction,” he said.

Top Nifty gainers – Tata Motors, Hero MotoCorp, and YES Bank

Top Nifty losers – SBI, Wipro, and IndusInd Bank

Stocks & Sectors:

Sectorally, the S&P BSE Consumer Durable index rose 1.3 percent, followed by the S&P BSE Realty index that was up 1.37 percent, and the S&P BSE Auto index also closed with gains of 1.05 percent.

Profit-taking was seen in the S&P BSE Bankex which was down 0.7 percent, followed by BSE Finance that fell 0.32 percent, and the Telecom index (0.3 percent).

Volume spike of 100-600% was seen in stocks like IDEA Cellular, YES Bank, Apollo Hospitals, and Castrol India

Long Buildup – NTPC, YES Bank, Castrol India, ACC, Gail India

Short Buildup – IndusInd Bank, Container Corp, Shriram Transport

Stocks in news:

Wipro share price fell over 3 percent after the company registered a 3.8 percent sequential decline in consolidated profit at Rs 2,455.9 crore for the quarter ended December 2019.

Yes Bank share price jumped 3 percent after the private lender acquired 30 percent stake in a Reliance Power subsidiary.

The stock of IndusInd Bank plunged more than 5 percent after the lender reported a sharp increase in gross slippages due to one travel account. Brokerages remain bullish but some slashed their target price. Kotak Institutional Equities has maintained an Add rating on the stock and has cut target to Rs 1,600 from Rs 1,650 per share.

Share price of Piramal Enterprises rose 6 percent on January 15 after a media report said that the company’s subsidiary had raised Rs 1,400 crore from banks.

Cox & Kings share price shed 5 percent on January 15 after the resignation of chief financial officer Milind Ramesh Gandhi. Gandhi resigned with effect from January 14 due to personal reasons.

Technical View:

Nifty50 formed a Dragon Fly Doji kind of pattern on the daily charts.

This kind of formation is usually witnessed around the higher end of rallies. It has the ability to reverse the prevailing trend.

If the Nifty trades below 12,278 levels for a larger part of the intraday then it can set the tone for short term trend reversal.

The strength is likely to shall reemerge on a close above 12,374 levels which can then help bulls in expanding this rally towards 12,490 levels.

Traders are advised to remain neutral on the index while shifting focus to stock-specific opportunities, suggest experts.

Three levels – 12278, 12355, 12400

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