It was another consolidation day on Friday as well as week for the market, especially after the Nifty clocked record high of 9,709.30 on June 6.
It was another consolidation day on Friday as well as week for the market, especially after the Nifty clocked record high of 9,709.30 on June 6. It indicated that the market may be fully priced in likely good earnings and economic growth in current financial year, especially after expectations of normal monsoon, faster recovery from demonetisation levels, likely early NPA resolution and political stability.
The 30-share BSE Sensex was down 19.33 points at 31,056.40 while the 50-share NSE Nifty gained 10 points at 9,588.05 on Friday. Benchmarks fell more than 0.6 percent in the week gone by.
So far in the passing week, the Nifty struggled a lot to get back above 9,600 level but failed after many attempts. The index is likely to recover in the coming week but is unlikely to cross previous record high.
If it breaks 9,500 level, experts expect further correction, which would be considered normal following a sharp rally of 17 percent since the beginning of 2017. A steep fall is unlikely in near term.
Consolidation in last two weeks suggested that the market await GST implementation (that is expected to be effective from July 1), June quarter earnings that will begin next month and monsoon progress that is likely to be strong in July.
"Friday's trading range was curtailed inside previous trading session’s range suggesting that for time being market is making an attempt to consolidate above its critical support levels placed around 9520," Mazhar Mohammad, Chief Strategist – Technical Research & Trading Advisory, Chartviewindia.in told Moneycontrol.
"As long as 9,520 is not breached on a closing basis the trend can remain sideways and positively biased," he said.
Jimeet Modi, CEO, SAMCO Securities said there are no major events in the coming week and therefore market will just oscillate without any firm direction. Investors should adopt a cautious approach, he advised.
Highlighting that in the current situation, macros are positive and could be better post good monsoon, Vibhav Kapoor of IL&FS told CNBC-TV18 that it was legitimate for the market to assume that these will translate into higher earnings growth.
Having said that he sees strong resistance for the Nifty at 9,650-9,700. A crossover from this point could take the index to 10000, he feels. But, in the near term, there could be a correction, but not a deep one, he said.
Despite consolidation in equity benchmarks, there is a lot of action in individual stocks as 154 stocks hit 52-week high on Friday, of which 58 clocked record high. Banking & financial, broking, real estate and smallcap technology companies' shares were a part of this list.
Banking finance companies like Can Fin Homes, DCB Bank, GIC Housing Finance, L&T Finance Holdings and Muthoot Finance hit an all-time high.
Among others, Endurance Technologies, Entertainment Network India, ICICI Prudential Life Insurance Company, Varun Beverages, Rane Holdings, Rane Brake Linings and Shankara Building Products also touched a life high today.
Bodhtree Consulting has been on buyers' radar, hitting upper circuits, especially after the company partnered with Infosys to provide GST solutions. The company also expects 40 percent revenue growth over next four years after clocking revenues at Rs 79 crore in FY17.
Meanwhile, Bajaj Finance, Interglobe Aviation, Eveready Industries, Colgate Palmolive, Va Tech Wabag, DHFL, Federal Bank, Indiabulls Ventures, Magma Fincorp, Indiabulls Real Estate, Motilal Oswal, South Indian Bank, Brigade Enterprises, BEML, Dredging Corporation, GMDC, GMR Infrastructure, NIIT Technologies, Pidilite Industries and Goa Carbon hit 52-week high.
Astral Poly Technik has been in upward trend after brokerage houses turned bullish on the stock. It surged 30 percent, since May 23, to hit 52-week high of Rs 702. It already achieved target of Rs 685 set recently by CLSA and ICICIdirect.
"We like Astral’s strong business model as it is transitioning from a pipes manufacturer to a scalable building-materials franchisee by leveraging its strong brand recall and distribution network. We believe Astral has multiple growth levers to generate industry-leading growth in the building-materials space. We expect Astral to see a 33 percent EPS CAGR over FY17-19, which would justify its premium valuations," CLSA said in its report dated June 1.
Inditrade Capital hit 52-week high during the day but ended with 1 percent loss. On June 14, Shilpa Porinju Veliyath picked up 0.6 percent stake in the company.
Jayant Agro-Organics rallied 4.6 percent today, after the board of directors approved issue of bonus shares and issue of securities on private placement.