Indian market hit a fresh record high on Tuesday but signs of consolidation at higher levels are emerging fast, suggest market experts. But, any dip towards 12,300 on the Nifty50 should be used as a buying opportunity, they say.
Trends on SGX Nifty indicate a positive opening for the index in India, with a 31.5 points, or 0.25 percent, gain. The Nifty futures were trading around 12,389-level on the Singaporean Exchange.
Let’s look at the final tally on D-Street on January 14 – the S&P BSE Sensex rose 92 points to 41,952 while the Nifty50 closed 32 points higher at 12,362. Both Sensex and Nifty ended at fresh record closing highs.
Indian market hit a fresh record high but binds got inflation shock which hurt banks. Bond Yields on 10-Year rose as much as 10 bps to 6.7 percent, the most since December 5 after retail inflation surged sharply in December to hit a five-year high
Rise in inflation would also take away the room from the Reserve Bank of India to cut interest rates further to boost economic growth.
Sectorally, the action was seen in FMCG, metals, Consumer Discretionary, IT, as well as auto stocks. Profit-taking was seen in banks, energy, and realty stocks.
The rupee gave away its early morning gains to settle on a flat note at 70.87 against the US dollar ahead of the signing of the US-China trade deal and weak macroeconomic data on the domestic front.
On the institutional front, FPIs were net sellers in Indian markets for Rs 205 cr while the DIIs were also net sellers to the tune of Rs 642 cr, provisional data showed.
Big News:
Mutual Fund managers lapped up stake in top stocks under infrastructure, consumer, as well as financial stocks ahead of the Budget 2020, December MF data showed.
Indian market rose more than 12 percent in 2019 to register fresh record highs while the asset under management (AUM) stood at Rs 26.5 lakh crore as of December-end 2019, an increase of 10 percent from a year ago, data released by AMFI showed.
Inflows into equity funds, including closed-ended schemes, jumped to Rs 4,432 crore in December, from Rs 933 crore in the previous month.
Monthly net equity inflows have come off significantly from the peak of Rs 20,308 crore in November 2017. However, the underlying trend continues to be very healthy.
Fund managers were quick in spotting stocks in the large, mid as well as small-cap space which were largely from infrastructure, consumer and finance sectors that is likely to benefit the most from the Budget 2020.
In the large-cap space, MF raised stakes in Ambuja Cement, DLF, Nestle India, Maruti Suzuki, UltraTech Cements, Godrej Consumer as well as Titan Company.
In midcaps, stocks like Quess Corp, RBL Bank, Crompton Greaves Consumer, Motilal Oswal Financial Services and Escorts witnessed buying during December 2019.
In small-caps, stocks like Can Fin Homes, Essel Propack, Suprajit Engineering, Welspun Corp and Narayana Hrudalaya witnessed the highest buying during December 2019.
Stocks in the news:
Mindtree's net profit jumped 45.9 percent to Rs 197 crore for the quarter ended December 2019 (Q3FY20) against Rs 135 crore in the previous quarter.
Software services provider, Wipro on January 14 registered a 3.8 percent sequential decline in consolidated profit at Rs 2,455.9 crore for the quarter ended December 2019.
Yes Bank will hold its Extraordinary General Meeting (EGM) at 11 am on February 7. According to a release, the bank stated it will seek shareholders' approval to raise its authorised share capital to Rs 1,100 crore at the EGM.
Technical View:
Nifty formed a bullish candle on the daily charts| Supertrend indicator gave a buy signal
There is one concern that is most of the indicators are in overbought zone; hence, some consolidation cannot be ruled out
Moreover, daily MACD generated a buy signal. However, its impact can be limited as the market has already rallied in the last 4 trading sessions from the lows of 11929.
Besides, similar buy signal from MACD in last December around 12200 levels failed to add incremental gains to Nifty which topped out in succeeding two sessions triggering a bigger correction from the highs of 12293 – 11929, suggest experts.
For time being traders will be better off by giving a miss to the limited gains on the upsides whereas weakness can be expected on a strong close below 12300 levels, they say.
Three levels: 12308, 12374, 12400
Max Call OI: 12500, 12400
Max Put OI: 12000, 12200
Technical Recommendations:
We spoke to SMC Global Securities and here’s what they have to recommend:
Amara Raja Batteries | Buy | LTP: Rs 759.40 | Target price: Rs 818 | Stop loss: Rs 710 | Upside: 7.72%
Trent | Buy | LTP: Rs 562 | Target price: Rs 611 | Stop loss: Rs 520 | Upside: 8.72%
Ircon International | Buy | LTP: Rs 445.65 | Target price: Rs 491 | Stop loss: Rs 415 | Upside: 10.18%
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