Nifty will look weak below 5,500

The market traded in the positive for the entire session and settled in the green for the second day. Sentiments were boosted following comments from RBI deputy governor Subir Gokarn that the central bank may go in for another CRR cut on the back of tight liquidity.

As we had mentioned in our Friday’s closing report, the Nifty crossed the level of 5,600 today and settled a little above it at 5,607. The gains were on a lower volume of 111.78 crore shares on the National Stock Exchange.

Resuming trade after an extended weekend, the local market opened mixed on reports that Eurozone policymakers agreed to a second bailout package for Greece. The Nifty started the day at 5,562, two points down from its Friday’s close while the Sensex gained 15 points to open trade at 18,304.

The market touched its intraday day low in the early session itself. At the lows, the Nifty fell to 5,562 and the Sensex went back to 18,293. However, brushing aside the sluggishness the indices soon picked up momentum on continued buying support from institutional investors.

The benchmarks were range-bound till post-noon trade as most markets in Asia were trading lower. Realty, consumer durables and oil & gas stocks led the upmove which began from around 2.00pm onwards. The gains helped the benchmarks hit their day’s high in the last hour. At the highs, the Nifty touched 5,622 and the Sensex scaled 18,471.

However, while the market came off the highs, it closed in the green for the second day in a row. At the close, the Nifty gained 43 points to 5,607 and the Sensex surged 139 points to settle at 18,429.

The advance-decline ratio on the NSE was in favour of the gainers at 1128:731.

The broader indices outperformed the Sensex today, with the BSE Mid-cap index gaining 0.91% and the BSE Small-cap index climbing 1.20%.

With the exception of the BSE IT index (down 0.16%) all other sectoral gauges settled higher. They were led by BSE Realty (up 4.34%); BSE Consumer Durables (up 3.29%); BSE Oil & Gas (up 2.29%); BSE Power (up 0.97%) and BSE Capital Goods (up 0.87%).

The top five scrips on the Sensex were BHEL (up 4.78%); ONGC (up 3.70%); Hindalco Industries (up 2.95%); Reliance Industries (up 2.92%) and Bharti Airtel (up 2.79%). On the other hand, Sterlite Industries (down 3.46%); Tata Power (down 2.61%); Wipro (down 1.46%); Tata Motors (down 0.99%) and Hindustan Unilever (down 0.82%) settled on the bottom of the index.

BHEL (up 4.56%) led the gainers on the Nifty. It was followed by ONGC (up 4.43%); Reliance Infrastructure (up 3.76%); Bharti Airtel (up 2.89%) and Hindalco Ind (up 2.85%). The major losers on the index were Sterlite Ind (down 3.61%); Tata Power (down 2.99%); BPCL (down 1.66%); Wipro (down 1.41%) and NTPC (down 1.28%).

Markets in Asia, which began trade on a soft note despite the positive news from Europe, pared their losses and settled mostly higher. The gains came as investors welcomed China’s weekend move to reduce the reserve requirement ratio for banks, a move that would lead to additional lending by banks.

The Shanghai Composite gained 0.75%; the Hang Seng rose 0.25%; the Jakarta Composite advanced 0.57%; the KLSE Composite climbed 0.21% and the Straits Times settled 0.13% higher. On the other hand, the Nikkei 225 fell by 0.23%; the Seoul Composite shed 0.03% and the Taiwan Weighted lost 0.42%. At the time of writing, the key European indices were in the negative while US stock futures were trading higher.

Back home, foreign institutional investors were net buyers of shares totalling Rs536.49 crore on Friday. On the other hand, domestic institutional investors were net sellers of equities amounting to Rs223.07 crore.

State-run Rural Electrification Corporation (REC) has received the finance ministry’s approval to raise Rs3,000 crore through issue of tax-free bonds this fiscal. The tax-free bonds issue, which will open on 5th March, will offer an interest rate of not less than 50 basis points below the yields on Government Securities. The stock declined 3.08% to close at Rs241 on the NSE.

Pharma major Ranbaxy Laboratories today said its subsidiary Ranbaxy Australia Pty Ltd (RAPL) has launched generic Atorvastatin tablets, used for reducing cholesterol, in the Australian market. Atorvastatin is the most prescribed statin in Australia and according to IMS its current market size $680 million. Ranbaxy closed 0.07% higher at Rs448.90 on the NSE.

JSW Steel plans to raise up to $275 million through overseas borrowings mainly to buy back its outstanding foreign currency convertible bonds. The fund raising exercise of up to $275 million includes a green-shoe option of $75 million, the company said. The stock rose 0.95% to settle at Rs863.55 on the NSE.