Market highly overbought soon may see some decline

In spite of being a day of expiry of futures and options, the market witnessed a range bound session until 2.00pm today. After that the indices suddenly spurted and then slumped again. The Indian benchmarks continued to hit an all time high for the fourth consecutive session.

Sensex opened at 22,116 and moved in the range of 22,094 and 22,308 and closed at 22,214 (up 119 points or 0.54%) while the Nifty which opened at 6,613 moved between 6,600 and 6,674 and closed at 6,642 (up 40 points or 0.61%). The NSE recorded a volume of 96.26 crore shares. Volume was high because of expiry.

Banking shares mainly public sector undertakings (PSUs) are in focus after Goldman Sachs upgraded ratings of state-owned banks. Macro recovery and potential for post-election reforms could lead to a gradual reduction in stressed loans, it said. Significant reforms under a stable government could lead to valuation re-rating in particular for PSU banks, that could provide a 66% average upside as stressed loans could fall sharply to 4.7% from 10.5% by FY18, Goldman says. Among the top 10 gainers in the ‘A’ group on the BSE were, Indian Overseas Bank (4.91%) to close at Rs50.25 on the BSE while SBI rose 4.04% to close at Rs1839.55.

Today again, Dr Reddys Lab was among the laggards in the BSE-30 stock.  Dr Reddys Lab fell 1.86% to close at Rs 2,587.10 on the BSE.

Suzlon Energy, one among the top 10 losers in the ‘A’ group on the BSE, fell 1.94% to close at Rs9.62 on the BSE. A proxy advisory firm, Institutional Investor Advisory Services India (IiAS) which gives voting recommendations to shareholders on company resolutions, has communicated to the shareholders to vote against the re-appointment of the chairman Tulsi Tanti as its managing director. “Under Tulsi Tanti’s leadership, the company’s performance has continued to falter and the company is now under a corporate debt restructuring (CDR) programme. IiAS believes that promoters’ interests will also be served by bringing in new management,” the advisory firm said, in a press release.

US indices closed in the negative on Wednesday. Orders for big-ticket items rose 2.2% in February, powered by higher bookings for autos and aircraft. Stripping out the volatile transportation sector, orders rose a smaller 0.2%.

Asian indices closed mostly in the green. Nikkei 225 (1.01%) was the top gainer while Shanghai Composite     (0.83%) was the top loser.

On Thursday, data showed mainland China industrial profits increased 9.4% in the two months through February year-on-year, compared with 17% growth a year earlier.

European indices were trading in the red while US Futures were trading in the green.

UK retail sales rose more than three times as much as economists forecast in February as Internet sales and spending on food surged, signaling the recovery maintained its momentum in the first quarter.