We have had five down sessions on the trot, a pullback was always lurking around the corner and on Wednesday we saw that pullback play out, says Udayan Mukherjee, managing editor, CNBC-TV18.
Below is an verbatim transcript of Udayan’s market-wrap on CNBC-TV18
In the first couple of hours on Wednesday, trading was wishy-washy. Nifty went down below 5,500 to levels of around 5,480. Then suddenly in the second half of the session, the market started picking up. It might have been prompted by some strength in global markets because Europe opened up quite smart.
This might have led to some short covering in the beaten down sectors, but there were reports of some fund buying as well below 5,500 on Wednesday, particularly in sectors like IT.
Frontline IT stocks were mostly up in Wednesday’s trading. Financials, which had got beaten up quite a bit over the last few days that sector bounced back with names like HDFC, Axis Bank, Kotak Mahindra Bank actually leading the charge.
Other frontline stocks like Larsen and Toubro (L&T) and Tata Motors did quite well, but frontline FMCG companies like Hindustan Unilever (HUL) ITC and some of the pharmaceutical winners like Sun Pharma did not have a very special session.
However, on Tuesday, we had lost a percent. So, to get back that 1 percent was not bad. Once again it is looking like a classic pullback rally in a downtrend which might have a little bit more by way of legs, particularly if the global strength that we saw on Wednesday lasts for the next couple of sessions.
The breadth was not special, just marginally higher number of advancing shares, but some individual names like Reliance Communications did very well. That stock was up some 12-13 percent. It lifted the mood on some of the other Anil Dhirubhai Ambani Group (ADAG) names like Reliance Capital, Reliance Power and Reliance Infrastructure as well. Delta Corp was up 20 percent. That has been a big underperformer but on Wednesday came back and hit a circuit on the way up.
Other winners include Sintex Industries, Hindustan Oil Exploration Company (HOEC), Indiabulls Real Estate, Hexaware, Zee Entertainment and Shasun Pharma. There were not too many losers in midcaps, but the prominent ones were Adani Enterprises, Metals and Minerals Trading Corporation (MMTC), Dish TV and IVRCL, which had a bit of an off day. However, Wednesday was a good session.