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Nov 13, 2007, 08.17 PM IST
Things look far more interesting and optimistic than they looked yesterday morning.
What a good pullback it has been since yesterday. Yesterday morning we tested 5,500, we broke that and the Nifty managed to hold on and pullback nicely yesterday and today is almost the perfect follow-up. In fact, since morning the market was looking strong, a little tentative in the first one hour of trade, as it drifted in and out of the red, because global markets were also consolidating and finding their feet. But then there was no two ways about what the market wanted to do today. Midcaps led from the front and that was a very good indication of what retail and HNI mood was like today and in the second half of the day, the market just tore away, and finally the real icing on the cake coming post 2 o’clock when the political news crept in that maybe the Left was holding an olive branch for the UPA in giving them the nod to go ahead with some talks with IAEA.
That saw the markets really flare up. At one point, it was up 450 points, ended with a more modest 350-point gain. But even so, from 18,400 kinds of levels back to 19,000+ for the Sensex , it has been quite a pullback for the market.
The Nifty too is 200 points off its low of yesterday, 5,500 back to 5,700. So, it has been a very good, strong comeback, and all the market leading sectors have come to the fore. Of course, midcaps have done particularly well today, which is why the breadth is good. Indices like the Nifty Junior are up more than 2-2.5%, the CNX Midcap Index did very well, volumes improved towards thee end of the session and the short covering that started yesterday, gained further momentum today. The Nifty Futures is consistently at a premium to the spot, which is telling you what is happening. In this fall, a lot of people might have got short, expecting much lower levels because of the global uncertainty and then they have had to cut their positions starting yesterday and more of that must have happened today. The result is what you can see in terms of the pullback.
Good leadership. We have had all the market leading groups. After the political development, power came out in a big way led by NTPC , Areva , Alstom , Power Grid , those kinds of stocks did extremely well. Metals have been performing. SAIL , Tisco and some of the smaller ones like Ispat , Sunflag Iron, Lloyds Steel , all looking extremely robust, and even banking which has had a bit of a sell-off had a very good session, led by the likes of UCO , Vijaya , Syndicate , Union Bank , and even private sector banks that have been selling-off from the ADRs like HDFC Bank and ICICI Bank had a very good pullback today.
Other largecap names like SBI , Reliance , NTPC as we mentioned had a good day. Beaten down MTNL had a very good comeback and even R Comm didn’t have a bad session. It is only technology that just refuses to participate, in any kind of upmove. The rest of the largecap space did pretty okay.
Midcaps looked even better. We spoke about some of the banks and the power stocks and metals, but RNRL is back in the reckoning with that big move today, around that Rs 165 mark again, though RPL is not giving you that kind of joy, it seems like there is more supply to soak up in RPL, which is why that stock has turned extremely sluggish. Other stocks that caught your eye today include the likes of Noida Toll Bridge , IDBI , Neyveli Lignite , Petronet LNG, Dish TV , Rain Calcining , Chambal Fertilisers . Of course the list is very long, but these are some of the marquee names that stood out today. Sugar had a good start, but then fizzled out towards the end of the day as the markets started rallying.
Net-net to cut a long story short, a very good comeback for the bulls in the last couple of days. Now the market is more evenly poised. Some people believe that it may get back all the way to new highs, others believe that it is just a process of consolidation. But things look far more interesting and optimistic than they looked yesterday morning.
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