Nifty may hit 5,040 if higher highs, higher lows continue

A recovery in the rupee and a boost from the European markets higher in the second half, however, a minor bout of selling resulted in a flat close with a negative bias. On a lower volume of 49.68 crore shares on the National Stock Exchange (NSE) the Nifty made a higher high and a higher low today. The index has to sustain this intraday behaviour in order to take the benchmark up to the level of 5,040.

The market opened marginally lower on weak global cues and the continuing downtrend in the rupee. While the Dow Jones Industrial Average and the S&P 500 logged small gains in late trade, the Nasdaq settled lower as lower revenue forecast by NetApp weighed on the index. The Asian pack was mostly lower in morning trade on concerns about the pace of global growth and Greece. Back home, the Nifty opened 15 points down at 4,906 and the Sensex resumed trade at 16,213, nine points lower.

Meanwhile, the rupee once again slipped to 56.07 a dollar in morning trade against its previous close of 55.64. Recovering from the lows of the day, the Indian currency was at 55.75 a dollar at noon.

A media report indicated that Goldman Sachs and Bank of America-Merrill Lynch have cut their growth forecasts for India. Their move follows a similar downgrade by Morgan Stanley earlier this week. Goldman Sachs said it was cutting its gross GDP forecast to 6.6% from 7.2% for the current fiscal while Merrill Lynch downgraded its forecast to 6.5% from its earlier estimate of 6.8% for fiscal 2012-13.

The market touched the day’s lows at around 10.40am where the Nifty fell to 4,889 and the Sensex went back to 16,118.

The market pared its losses and was headed higher in noon trade following a recovery in the rupee and a green opening of the key European indices. While the benchmarks entered into the positive, they were moving sideways on both sides of the previous close in post-noon trade amid a fair measure of volatility.

Reversing initial decline against the dollar, the rupee was trading 26 paise higher at 55.39 against the American currency in the mid-session Friday on fresh selling of dollars by banks and exporters. RBI governor D Subbarao today met prime minister Manmohan Singh to discuss measures to be taken to curb the rupee’s slide.

The market hit its intraday high around 2.00pm with the Nifty going up to 4,936 and the Sensex rising to 16,273.  However, fluctuations continued till the end of trade with the indices moving in a narrow range.

The market closed flat despite gains in the European markets. The Nifty closed one point lower at 4,920 and the Sensex shed four points to 16,218.

The advance-decline ratio on the NSE was 826:587.

While the benchmarks saw a flat close, the broader markets closed higher. The BSE Mid-cap index gained 0.44% and the BSE Small-cap index climbed 0.53%.

The top sectoral performers were BSE Metal (up 0.92%); BSE Capital Goods (up 0.89%); BSE Realty (up 0.54%); BSE PSU (up 0.53%) and BSE Bankex (up0.31%). The main losers were BSE Fast Moving Consumer Goods (down 0.46%); BSE Consumer Durables (down 0.28%); BSE Healthcare (down 0.13%); BSE Oil & Gas (down 0.07%) and BSE IT (down 0.05%).

The top Sensex stocks were GAIL India (up 3.37%); Tata Steel (up 2.43%); DLF (up 1.89%); State Bank of India (up 1.74%) and Larsen & Toubro (up 1.54%). The main laggards on the index were Jindal Steel (down 2.59%); Maruti Suzuki (down 2.46%); Mahindra & Mahindra (down 2%): Hindustan Unilever (down 0.88%) and HDFC (down 0.86%).

The top five stocks on the Nifty were GAIL India (up 3.70%); Jaiprakash Associates (up 2.94%); Tata Steel (up 2.66%); Cairn India (up 2.49%) and State Bank of India (up 2.37%). The major losers were Jindal Steel (down 2.58%); Maruti Suzuki (down 2.32%); M&M (down 2.10%); Bank of Baroda (down 1.71%) and Power Grid Corporation (down 1.28%).

Markets in Asia fell on the unending debt crisis in Europe and on worries that major Chinese banks might miss their lending targets on account of a slowdown in the economy. Companies engaged in exports to Europe were hurt because of the economic and political turmoil in Europe.

The Shanghai Composite declined 0.74%; the Jakarta Composite tanked 2.07%; the Straits Times fell by 0.24% and the Taiwan Weighted dropped 0.75%). On the other hand, the Hang Seng gained 0.25%; the KLSE Composite rose 0.19%; the Nikkei 225 advanced 0.20%; and the KOSPI Composite climbed 0.53%).

At the time of writing, the key European indices were up between 0.06% and 0.85% while the US stock futures were in the positive.

Back home, foreign institutional investors were net sellers of equities totalling Rs105.73 crore on Thursday, whereas domestic institutional investors were net buyers of shares amounting to Rs130.02 crore.

The board of Videocon Industries has approved a recommendation to segregate its international and domestic oil and gas business by way of a demerger. It has, in-principle, agreed to the appointment of various agencies for working out detailed alternative schemes for unlocking the shareholders value. The stock gained 0.46% to close at Rs174.55 on the NSE.

TTK Prestige has launched a range of gas tables and induction cooktops with glass tops in partnership with Schott AG. The products are being introduced under the brand name Prestige Premia. The stock added 0.01% to close at Rs2,926.65 on the NSE.