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Record closing high: Nifty ends August series above 7950

17:10

The News International Team

The 50-share NSE Nifty ended the August series at new closing high on
Thursday supported by private banking and financials, capital goods, FMCG and oil & gas stocks. High rollovers to the September series were seen today on hopes of new reforms by the Modi government going ahead.

The index rose 18.30 points to 7954.35 while the 30-share BSE Sensex climbed 77.96 points to 26638.11 but the broader markets underperformed benchmarks with the BSE Midcap falling 0.3 percent.

After the 3 percent gains in August series, the market is expected to maintain northward journey in September series with continuing resurgence in midcaps, say experts, though they feel the market is overpriced.

“Valuation models based on assets or long-term cash flows – price / book versus return on equity and dividend discount suggest a potential upside of 8-10 percent through to the end of the fiscal year,” says Bharat Iyer, JPMorgan.

Technically, CK Narayan of Growth Avenues feels the market should continue the upward path at least over the next two months and it is more than likely that the much anticipated 8000 levels would soon become part of history.

Meanwhile, the Prime Minister Narendra Modi has unveiled Pradhan Mantri Jan Dhan Yojana on the day of completion of 100 days by his government, with the aim that all poor people will have their bank accounts. Public sector banks will organise more than 60,000 camps in rural and urban areas.

Indian corporates gave thumbs up to Modi government as it completed 100 days, with the hope that faster-decision making will put India back on high growth path. They urged that goods and services tax, general anti avoidance rule and retrospective tax issues must be resolved.

For the week, the Sensex gained 0.8 percent and Nifty rose 0.5 percent, continuing upmove for the third consecutive week. FMCG, Pharma, Auto and IT indices gained 1-3 percent whereas Realty, Metals, PSU Bank and Power fell 3-5 percent.

Stocks in action

State-run power equipment maker BHEL topped the buying list, up 5 percent followed by L&T, ONGC, Wipro, Dr Reddy’s Labs and GAIL with 1-2 percent.

Shares of ICICI Bank (up 1 percent), Tata Motors (up 0.5 percent) and Tata Communications (up 4.5 percent) as CLSA advises buying these stocks with a target price of Rs 1830, Rs 570 and Rs 450, respectively.

However, PSU banks were under pressure after report suggested that the Economic Offence Wing Mumbai is probing role of public sector banks relating to the fixed deposit (FD) scam. Sources said around 10 first information reports (FIRs) have been registered against many private persons and some public sector bank officials. The CNX PSU Bank Index was down 1.8 percent with the State Bank of India falling 1.7 percent.

Drug makers Sun Pharma and Ranbaxy Labs fell 0.8 percent and 1.3 percent, respectively after the Competition Commission of India asked both companies to make public details of their proposed transaction in a “prescribed format” within 10 working days.

Shares of Infosys, TCS, NTPC, Tata Power, Bajaj Auto and Hindalco were other prominent losers, down 0.8-2 percent.

In the broader space, railway stocks like Texmaco Rail, Kalindee Rail, Titagarh Wagons, Stone India, BEML and Kernex Microsystems rallied 2-5 percent after the government notified the liberalised FDI norms for the railway infrastructure. The government permitted 100 percent foreign direct investment through automatic route in several areas, including high speed trains.

GVK Power and Infrastructure was locked at 5 percent upper circuit for second consecutive session. Its subsidiary GVK Power (Goindwal Sahib) has got permission from the environment ministry to import coal from South Africa.

Declining shares outnumbered advancing ones by a ratio of 1552 to 1380 on the Bombay Stock Exchange.

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