Taking Stock | Market bounces back as investors cheer easing inflation, strong IT earnings

The Indian market cheered positive earnings from IT majors and cooling of prices in India as well as the US, which eased rate hike worries, lifting the benchmark indices half a percent higher on January 13.

At close, the Sensex was up 303.15 points, or 0.51 percent, at 60,261.18, and the Nifty was up 98.40 points, or 0.55 percent, at 17,956.60.

India's retail inflation rate eased to a one-year low of 5.72 percent in December from 5.88 percent in the previous month, while the Index of Industrial Production (IIP) accelerated to 7.1 percent, data released on January 12 said.

US consumer prices, too, fell unexpectedly for the first time in more than two and a half years in December, fuelling hopes of a slower pace of rate hike by the Federal Reserve.

Despite positive global cues, the market opened lower and extended losses as the day progressed. Mid-session buying, however, wiped out all the losses and the session ended near the day's high.

"Easing inflation and brighter Q3 numbers projected by the second set of IT majors are outweighing the cautiousness of the market,” said Vinod Nair, Head of Research at Geojit Financial Services.

A drop in prices bolstered expectations of a less aggressive policy. Falling treasury yields and dollar index improved investor sentiment, he said.

Also Read: Wipro Q3: Firm's net profit rises 3 percent to Rs 3,053 crore, meets estimates

Stocks and sectors

Adani Enterprises, Tata Steel, IndusInd Bank, Eicher Motors and Infosys were among the top gainers on the Nifty. Titan Company, Apollo Hospitals, Nestle India, Larsen & Toubro and ITC were among the biggest losers.

All sectoral indices ended in the green. Nifty PSU bank and metal added over a percent each, while auto, bank, energy and information technology indices gained 0.5 percent each.

BSE midcap and smallcap indices ended flat.

On the BSE, metal and power indices rose a percent each, while oil & gas, auto, bank and information technology indices added 0.4-0.9 percent.

Also Read: India FY24 capex may rise 30 percent with focus on growth: Barclays

PNB Housing Finance, Rico Auto Industries, Camlin Fine Sciences, Jindal Steel & Power and Kamat Hotels and were among the stocks that touched their 52-week high on the BSE.

Among individual stocks, a volume spike of more than 500 percent was seen in Whirlpool of India, Multi Commodity Exchange of India and L&T Technolgy Services.

A short build-up was seen in Gujarat Gas, L&T Technology Services and Laurus Lab. A long build-up was seen in Multi Commodity Exchange of India, Cholamandalam Investment and Finance Company and NMDC.

Outlook for January 16

Gaurav Ratnaparkhi, Head of Technical Research, Sharekhan by BNP Paribas

During the week, the Nifty swung sharply in both directions to end the week on a positive note. It formed a Doji pattern on the weekly chart.

For the last few weeks, the index was trading above the 20 WMA, which resulted in a Triangle pattern on the daily chart. After a recent base formation near the lower end of the pattern, the Nifty made a smart recovery on January 13.

Going ahead, 18,000-18,050 will be the key area beyond which the index will be set for a larger up move. On the downside, 17,800 will continue to provide cushion for the index.

Ajit Mishra, VP-Technical Research, Religare Broking

On January 16, markets will react to HDFC Bank’s third quarter results. The recent recovery in the global markets has failed to impress the participants, so far, however, the mood might change if they manage to sustain the gains.

To regain strength, the Nifty should decisively cross the 18,100 mark. Participants should restrict positions and prefer a hedged approach.

Disclaimer: The views and investment tips expressed by experts on Moneycontrol are their own and not those of the website or its management. Moneycontrol advises users to check with certified experts before taking any investment decisions.