Sustained FII buying amid positive global cues propelled the Indian stock market higher for the fourth successive session on September 13, as investors seem to have taken the uptick in inflation and lower IIP numbers in their stride.
The 30-share BSE Sensex was up 456 points, or 0.76 percent, at 60,571. The broader Nifty gained 133.7 points, or 0.75 percent, to scale the psychologically vital 18,000 level and close at 18,070, five months after the index had scaled these levels.
India’s consumer price index (CPI) inflation edged higher from 6.7 percent in July to 7 percent in August, data released on September 13 showed. The IIP data at 2.4 percent was lower than estimates of 4.2 percent.
Also read: Investors shrug off inflation worries, drive Nifty to scale 18,000 level
“Positive indicators from the domestic economy, such as FII inflow, improving macro-parameters, and decreased inflation, were the key factors for the current surge in the Indian market”, said Vinod Nair, Head of Research, Geojit Financial Services.
The market also tracked the strong showing by the US shares the previous day in the hope that inflation might have finally peaked amid softer crude prices. The US CPI data will be released late in the evening.
Asian markets, too, had a largely positive day and European markets were trading higher in the early session, aiding sentiment.
“The Nifty has touched 18,000 because the undercurrent in the market is robust and we are also seeing how FIIs have come back strongly,” said Sunil Damania, Chief Investment Officer, Marketsmojo. “Even the volume in the market has improved significantly.”
Stocks & sectors
Tata Consumer Products, IndusInd Bank, Britannia, Bharti Airtel, and Titan Company for the top Nifty gainers with each gaining between 1.7 to 2.9 percent.
Among the losers, Shree Cements, Cipla, Eicher Motors, BPCL and Tata Consultancy Services lost between 0.4 to 0.8 percent each.
The Nifty metal index was the top sectoral performer, as it gained 1.3 percent. Strong buying was also seen in financials and private banks which gained just under 1 percent while the FMCG index rose by 0.75 percent.
Nifty Realty and IT index were the laggards.
On the BSE, BSE financials and banks gained around a percent each, while FMCG, metals, capital and consumer goods gained around 70 basis points each.
BSE oil & gas and realty were the top losers, down 20 basis points each.
The broader indices, too, displayed strength and moved higher. The BSE midcap index closed with a gain of 0.32 percent and the smallcap index was up 0.24 percent.
The India VIX, which indicates the degree of volatility traders expect over the next 30 days, declined 2.6 percent from 17.9 to 17.5.
A long build-up was seen in Trent, L&T Housing Finance, and SRF Ltd, while Astral, Dr Lal Pathlabs and Crompton Greaves witnessed a short build-up on their counters.
Among specific stocks, a volume spike of more than 400 percent was seen in Tata Communications, L&T Housing Finance and Bata India.
More than 240 stocks on the BSE scaled new 52 week highs. These include Aditya Birla Fashion & Retails, Adani Enterprises, Campus, Concor, DB Corp, Eicher Motors, ITC, Lemon Tree, M&M Finance and SRF.
Outlook for September 14
Shrikant Chouhan, Head of Equity Research (Retail), Kotak Securities Ltd
The market had a busy day, aided by strong global cues and FII buying momentum. If the US inflation moderates, markets may gain more ground.
Technically, the Nifty has successfully cleared the short- term resistance of 18,000, which is broadly positive.
On daily and intraday charts, the index is holding an uptrend continuation formation.
For the Nifty, 18,000 and 17,925 will act as key support levels, while 18,150-18,200 would be key resistance levels. Below 17,925, the uptrend will be vulnerable and index can to 17850-17800.
Prashanth Tapse-Research Analyst, Senior VP (Research), Mehta Equities Ltd
The Nifty finally broke the shackles to end above the 18,000 mark and that, too, after five months.
The market seems to have shrugged off the fact that the Fed will almost certainly go for a third-straight 75 basis point rate hike on September 21.
The biggest catalyst and next direction for the Nifty will be the US CPI inflation print for August.
For the September 14 session, Nifty’s major hurdle is seen at an all-time high of 18,605 mark, with an immediate hurdle at 18,301.
Ajit Mishra, VP-Research, Religare Broking Ltd
The recent rebound in the global markets, especially the US, is adding to the market strength and we reiterate our immediate target of 18,100. Apart from the heavyweights, participants should also look at broader indices for trading opportunities.
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