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Last Updated : Apr 02, 2019 08:00 AM IST | Source: Moneycontrol.com

A morning walk down Dalal Street | Stay neutral, wait for consolidation or correction before creating fresh longs

In the next trading session, a close below 11,630 can act as a confirmation for short-term weakness that can set a bearish tone for the near term.

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Well, there were no Monday blues as Sensex hit a fresh record high above 39,000 for the first time at 39,115 while the Nifty50 close 91 points short of hitting its record high.

Banks led the gains from the front as Nifty Bank hit yet another record high of 30,648, led by gains in Bank of Baroda, PNB, Federal Bank, IDFC First Bank, SBI, and Kotak Mahindra Bank.

The index witnessed profit-booking ahead of the bi-monthly monetary policy review meet on April 2-4. The consensus is already factoring 25 basis points cut in policy rates and expect the commentary to turn dovish in the review meeting.

Though certain sections of the market are expecting more aggressive 50 basis points rate cut due to soft inflation and slowdown in economic growth momentum, suggest experts.

Late selling clipped gains which pushed Sensex below 39,000 and 11,700 for the Nifty50. The S&P BSE midcap index rose 0.52 percent while the BSE Smallcap index gained 0.78 percent in the same period.

On the institutional front, FPIs were net buyers in Indian markets for Rs 898 crore while the DIIs were net sellers to the tune of Rs 1032 crore, provisional data showed.

Big News:

We received mixed macro news on Monday where GST collections registered a rise while Core sector growth slipped. A slowdown in growth could push RBI in cutting rates in the upcoming policy meeting.

GST collection in March 2018-19 has been the highest ever since the introduction of the indirect tax regime with the government recording a 15.6 percent growth in revenue over 2017-18.

India's eight core industries grew 2.1 percent in February 2019, data released by the Commerce Ministry on April 1 showed.

The eight core sectors, which include coal, crude oil, natural gas, refinery products, fertilizers, steel, cement, and electricity, had recorded a growth of 5.4 percent in February 2018.

Core sector data has 40.27 percent weight in the Index of Industrial Production (IIP)

The rating agency, Ind-Ra believes that the performance of steel (long products) and cement has performed well on account of the focus on affordable housing followed by road construction. Flat steel products have been adversely impacted by the slowdown in the auto sector.

Technical View:

Nifty formed a Gravestone Doji kind of pattern on charts

In the next trading session, a close below 11,630 can act as a confirmation for short-term weakness that can set a bearish tone for the near term

Traders to maintain a neutral strategy on the index for time being and wait for either consolidation or correction before creating fresh longs.

Three levels: 11644, 11738, 11760

Max Call OI: 12000, 11800

Max Put OI: 11600, 11400

Stocks in news:

Realty firm Godrej Properties on Monday said it sold 2,900 flats for over Rs 2,100 crore during the fourth quarter of last fiscal.

India's second largest IT services firm Infosys on April 1 said it has completed the formation of its joint venture with Hitachi, Panasonic Corporation and Pasona Inc, strategically enhancing presence in Japan.

Shares of Reliance Industries jumped over 3 percent to a record high of Rs 1,406.50 during the day, with its market valuation inching close to Rs 9 lakh crore mark.

Disclosure: Reliance Industries Ltd. is the sole beneficiary of Independent Media Trust which controls Network18 Media & Investments Ltd.

Technical Recommendations:

We spoke to HDFC Securities and here’s what they have to recommend:

Grasim Industries Ltd: Buy| LTP: 855.35| Target: Rs 935| Stop-Loss: Rs 820| Return 9.3%

Tinplate Company of India Ltd: Buy| LTP: Rs 158.80| Target: Rs 185| Stop-Loss: Rs 150| Return 16.5%

Johnson Controls-Hitachi Air Conditioning India Ltd: Buy| LTP: Rs 2025| Target: Rs 2280 |Stop-Loss: Rs. 1950| Return 12%

Disclaimer: The views and investment tips expressed by investment expert on Moneycontrol.com are his own and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions
First Published on Apr 2, 2019 07:18 am
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