Sensex, Nifty end higher for 3rd day; post 3% weekly gain

Moneycontrol Bureau

After a consolidation, equity benchmarks managed to close higher for the third consecutive session on Friday, aided by technology, healthcare, metals and select auto stocks. Meanwhile, the week was very strong for the market, led by relief rally.

The 30-share BSE Sensex gained 17.19 points at 28463.31 and the Nifty rose 1.80 points to 8609.85. The broader markets marginally outperformed benchmarks as the BSE Midcap and Smallcap indices advanced 0.2-0.4 percent.

Experts believe the market has been in a broad consolidation range and that may continue in July at least.

Vibhav Kapoor of IL&FS said the Nifty may consolidate in a range of 8000-8700, although the macros have improved in the last few months. Substantial improvement in earnings will be seen only after 2 quarters, he believes.

For the week, the Sensex and Nifty rallied 3 percent each while the CNX Midcap Index climbed 3.5 percent after European Union cleared Greece's bailout package and clearance to composite FDI cap from cabinet. BSE FMCG Index gained the most among sectoral indices, up 8.8 percent followed by Bank Nifty, BSE Pharma, Oil & Gas, Auto and IT with 2-5 percent upside.

Banking & financials stocks saw selling pressure today as investors awaited more clarity on composite FDI cap cleared by the cabinet on Thursday. Finance ministry sources told CNBC-TV18 that FDI cap will be subject to sectoral conditionalities. For FII investment in banks, government's nod could be needed for any stake above 49 percent, sources said.

Housing finance company HDFC lost 2.5 percent. Axis Bank and Kotak Mahindra Bank lost 1 percent each. HDFC Bank and State Bank of India declined 0.3 percent each.

Stocks stocks were in focus today as the government became strict with heavily indebted steel companies. Sources said banking secretary told banks not to give fresh loans to certain steel players till they sell assets and pare down debt. The heat also built on Bhushan Steel, Essar Steel, Visa Steel and Electrosteel Steels to sell assets or bring in more equity investors, sources added.

Electrosteel Steels, Bhushan Steel and Visa Steel rallied 2-5.5 percent. Tata Steel and Vedanta gained 1 percent each.

Technology stocks saw buying interest despite the US government widened its visa probe against misuse of H1B visas. CNBC-TV18 learnt that the probe now extended to all layoffs of US workers between 2009 and 2015. Large Indian it companies believed to be under the scanner. Infosys (up 1.44 percent), TCS (up 0.8 percent) and Tech Mahindra (up 2 percent) were gainers while Wipro lost 0.8 percent.

Among pharma stocks, Lupin rose 1 percent on getting approval from US Food and Drug Administration for diabetes drug PrandiMet. Sun Pharma advanced 0.8 percent as brokerage CLSA raised target price on the stock to Rs 1,160, citing potential of Ranbaxy's Mohali plant. "Sun’s strong positioning in key business verticals and synergy benefits from the Ranbaxy turnaround makes it a high conviction buy with an upside of 24 percent," it reasoned. Cipla and Dr Reddy's Labs gained 0.7 percent each.

Mahindra & Mahindra and BHEL were other prominent gainers, up 1.7-2 percent while HUL and Coal India lost 1-1.9 percent.

In the broader space, Motherson Sumi Systems ended at record closing high of Rs 530.10, up 1.2 percent after strong European car sales in June despite Greece crisis. Education stocks like Educomp Solutions, Aptech and Kokuyo Camlin saw buying interest, up 3-14 percent.

NIIT rallied 11 percent after reporting a 25 times growth in first quarter profit at Rs 15 crore compared to Rs 0.6 crore in the corresponding quarter of last fiscal.

On the global front, European markets were cautious ahead of the German parliamentary vote on the Greek bailout. France's CAC, Germany's DAX and Britain's FTSE were mixed. Asian benchmarks barring Kospi closed higher; Shanghai Composite rallied 3.5 percent.