April 11, 2013 / 19:32 IST
Moneycontrol Bureau
Benchmark indices rose for the second consecutive session Thursday, even as the market was divided on whether the gains could be sustained in the face of weak macro economic data and tepid corporate earnings growth.
The Sensex closed at 18542, up 127 points over the previous close, and the Nifty rose 35 points to close at 5594. Realty, IT and banking shares were the best performers, while metal, power and oil & gas shares struggled.
"We could see some pullback but I don’t think people really believe that it will sustain," Ambareesh Baliga, managing partner Edelweiss Capital said in an interview to CNBC-TV18 earlier today.
"So, anything closer to about 5600-5620 will see selling coming in. If it sustains above that level, though I doubt it would, only then should people should go out and buy," he said.
The next key resistance for the Nifty is at 5647, according to technical analysts, as it is the 200-day moving average. Dealers attribute the recovery in the last couple of sessions mainly to short covering of positions. However, it corporate earnings disappoint more than expected and foreign fund inflows continue to slow, bears will be emboldened to strike even more aggressively.
Tata Motors was a big gainer large cap stocks, gaining 4 percent to close at Rs 278, powered by record global retail sales at its British luxury Jaguar Land Rover unit. Analysts tracking the stock said the sharp rise in sales was partly due to seasonal factors, but nevertheless helped offset the weakness in the domestic market.
"For the domestic business, while the outlook is weak currently, street expectations from the same have reduced more than proportionately," brokerage house Antique said in a note to clients while maintaining its buy call on the stock with a price target of Rs 353.
Infosys shares close to 4 percent finish at Rs 2918, ahead of its fourth quarter earnings announcement Friday. Analysts expect the company to meet earnings guidance, maybe surprise a bit on the upside.
ICICI Bank and DLF were the other key gainers among top tier stocks, gaining 3.5 percent and 5 percent respectively.
Among laggards, Wockhardt, Pantaloon Retail, Oberoi Realty and Hexaware Tech fell around 3 percent each.
Brokerage house Morgan Stanley feels the market is poised for an uptrend, according to the indicators the firm tracks. These indicators are sentiment, liquidity, interest rates and bearish trades.
"RBI's hawkish guidance, political uncertainty, a severe contraction in the fiscal deficit with negative growth implications, margin calls in the broad market and bunched up supply from the government took its toll on the market," said the Morgan Stanley note to clients today.
"These indicators are now even more convincingly suggesting higher equity prices. The catalysts could range from the earnings season and RBI action to government policy and better macro stability data (trade deficit and inflation)," the report adds.
