Nifty hits 6300, Sensex strong; Infosys loses 1%

Moneycontrol BureauLive Market Commentary

9:50 am News update:In a setback to the Diageo-United Spirits Ltd (USL) deal, the Karnataka High Court on Friday annulled the sale of USL shares by its parent firm United Breweries Holding Ltd (UBHL), in light of existing claims of Kingfisher Airlines’ creditors.

Lenders of Kingfisher Airlines had filed a “winding-up petition” against UBHL, the corporate guarantor for many of its liabilities.

The court arrived at that judgment after overturning an earlier order that allowed the original share sale in lieu of a deposit. USL is likely to remain volatile in the short term, said a report by brokerage firm Morgan Stanley. It, however, added that it remained “overweight” on the stock and that the HC ruling did not change the long-term fundamental view.

9:40 am FII view Gautam Shah of JM Financia says 6150 is the immediate support, which once broken should take the index towards 6030 and then 5950. "Till the index does not move past 6300 on a closing basis, we will have to maintain a short-term bearish stance. Overall, rallies should only be used to sell," he adds.

Nandan Chakraborty of Axis Capital feels gradual withdrawal of Federal Reserve quantitative easing (QE) likely to be a mixed bag for India. In the near-term, funds flow into India could get hit a bit, impacting the rupee. "However, India is in a better position now to withstand the taper as its current account deficit has shrunk sharply and is expected to cool off to 2.5-2.7 percent of gross domestic product in FY14. Moreover, divestments, spectrum auctions and MNC buyback actions could also act as a pull for overseas flows in the near term," he says.

9:30 am Market data: Nine of the top 10 Sensex companies added Rs 57,183 crore in market value last week, with IT majors TCS and Infosys emerging as the biggest gainers.

TCS and Infosys together accounted for more than half of the gain. The market capitalisation (m-cap) of TCS climbed Rs 22,849 crore to Rs 4,15,162 crore, while that of Infosys jumped Rs 10,247 crore to Rs 2,03,985 crore.

Reliance Industries added Rs 9,791 crore in value to Rs 2,88,760 crore. Wipro's m-cap surged Rs 7,400 crore to Rs 1,35,342 crore, while ONGC's value rose Rs 3,294 crore to Rs 2,43,275 crore.

9.24 am Market check: The market has gained momentum as Nifty hits 6300. The Nifty is up 33.15 points at 6307.40 while the Sensex gains 120.40 points to be at 21200.12. About 661 shares have advanced, 180 shares declined, and 43 shares are unchanged.

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The market has opened on a flat note. The Sensex is up 7.15 points at 21086.87, and the Nifty down 3.30 points at 6270.95. About 293 shares have advanced, 93 shares declined, and 16 shares are unchanged.

Infosys is reacting negatively (down 1 percent) as its top management exodus continues since V Balakrishnan, director, resigned to start his own private equity firm. This is the eight top level exit at Infosys since June. Balakrishnan told CNBC-TV18 that his exit has nothing to do with Narayana Murthy's return.

Banking stocks are also weak today with pressure seen in HDFC Bank and SBI. Other losers in the Sensex are Tata Power and Sesa Sterlite. On the gaining side are Hindalco, Bajaj Auto, L&T, NTPC and ONGC.

Meanwhile, the rupee opened at 62.07 against the US dollar on Monday, down 3 paise compared to Friday's closing value of 62.04 per dollar. The dollar index held above the 80.50 mark. Meanwhile the dollar-yen continued to trade around 104 level.

In commodities, Brent Crude prices rise with Nymex following suit, supported by refinery outages in the United States that will boost the need for gasoline imports linked to the global benchmark, and on reduced Libyan supply.

And from the precious metals space, gold ticked up on Monday after its biggest weekly loss in a month, but the metal was still at the risk of falling back below USD 1,200 an ounce as investors fretted over the impact of a US stimulus tapering.

The US gross domestic product (GDP) for Q3 came in better-than-expected propelling the markets higher and the Dow and S&P 500 closed at record highs. The US markets notched up 2-3 percent gains for the week. European markets too record their best week in eight months and Asian markets opened modestly higher in early trade.