Taking Stock: Nifty scales 10,800 again, but lacks conviction; financials weigh on sentiment

Bulls managed to remain in control of D-Street amid volatile trade on July 13. While Reliance Industries aided gains by hitting a fresh record high and surpassing the market capitalisation of Rs 12 lakh crore, selling in financials weighed down the index.

The S&P BSE Sensex rallied nearly 100 points while the Nifty 50 reclaimed 10,800 levels. Experts pointed out that selling in financials should be taken as a sign of caution.

Let’s look at the final tally on D-Street – the S&P BSE Sensex rose 99 points to 36,693 while the Nifty50 rose 34 points to close at 10,802.

“We’re seeing hesitation in the market at the higher levels despite upbeat global cues and it could be largely due to caution ahead of the earnings announcements. Besides, the continuous underperformance of the banking index, which holds significant weightage in the index, is also adding to the chaos,” Ajit Mishra, VP – Research, Religare Broking Ltd told .

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“Traders should maintain extra caution now as stocks usually react sharply, even on a small dip in the benchmark. Defensives viz. pharma, FMCG and IT usually do well in such a scenario, so plan your positions accordingly,” he said.

Sectorally, the action was seen in energy, telecom, IT, metals, and FMCG stocks while profit-taking was visible in realty, finance, banks, and power stocks.

On the broader markers front — the S&P BSE Mid-cap index rose 0.05 percent while the S&P BSE Small-cap index fell 0.15 percent.

Top Nifty gainers include names like RIL, Hindalco Industries, HCL Tech, and Tech Mahindra.

Top Nifty losers include names like Power Grid, HDFC, HDFC Bank, and Bajaj Finance.

Stocks & Sectors:

Sectorally, the S&P BSE Energy index rose 2.4 percent, followed by the S&P BSE Telecom index that was up 1.9 percent, and the S&P BSE IT index gained 1.5 percent.

Selling pressure was seen in the S&P BSE Realty index that was down 1.5 percent, followed by the S&P BSE Finance index that fell 1.4 percent, and the S&P BSE Bankex was down 1.3 percent.

Volume spike of more than 100% was seen in stocks like ACC, Tech Mahindra, NTPC, Bharat Forge, and Indiabulls Housing Finance.

Long Buildup was seen in stocks like Indiabulls Housing Finance, MindTree, and Bharat Forge.

Short Buildup was seen in stocks like SAIL, Biocon, and Canara Bank.

More than 120 stocks hit a fresh 52-week high that includes names like Dixon Technologies, Britannia Industries, L&T Infotech, RIL, and Dr Lal Pathlabs.

Stocks in news:

Reliance Industries stock price jumped over 3 percent hitting fresh record high after Qualcomm Ventures has committed to invest up to Rs 730 crore in Jio Platforms at an equity value of Rs 4.91 lakh crore.

Disclosure: Reliance Industries Ltd. is the sole beneficiary of Independent Media Trust which controls Network18 Media & Investments Ltd.

Infosys stock gained almost 2 percent after the company along with Old National Bancorp announced a strategic partnership.

Avenue Supermarts share price was down over 4 percent after the company reported an 87.6 percent fall in June quarter earnings due to the nationwide lockdown to control the spread of COVID-19.

Yes Bank stock tumbled over 13 percent after reports suggested that Securities and Exchange Board of India (Sebi) may look into a large amount of share transaction of the bank under the Securities Lending and Borrowing Mechanism (SLBM).

HDFC Bank share price was down 2 percent after sources said that the Bank is conducting a probe in alleged improper practices in the vehicle finance business. Bank probing alleged conflict of interest in marketing GPS system to auto loan customers.

Sadbhav Engineering stock jumped 5 percent after foreign brokerage CLSA gave a buy call on the stock with a target of Rs 120 per share.

Lakshmi Vilas Bank share jumped 5 percent after the bank made operating profit at Rs 70 crore helped by a rise in net interest income in line with the fall in interest rates.

Technical View:

Nifty formed a bearish candle on daily charts

It found resistance near 200-DMA but managed to close above 5-Days EMA

The index was consolidating in the range of 10680 to 10850 zones in the entire week and now follow up is missing even after surpassing above 10850 zones.

Traders should continue to deploy a buy on decline strategy.

Now, Nifty has to continue to hold above 10700 zones to extend its move towards 11000 levels while key support exists at 10650 then 10550 levels.

On option front, maximum Put OI is at 10000 followed by 9000 strikes, while maximum Call OI is at 11500 followed by 11000 strikes.