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Sensex, Nifty trim gains; midcap declines, HDFC spikes 4%

10:00

The News International Team

10:40am Market Update

The Sensex trimmed gains, up 248.91 points at 29254.93. The Nifty held 8800 level, up 58.75 points at 8820.15. However, the broader markets underperformed frontline indices as the BSE Midcap and Smallcap indices fell 0.4 percent and 0.6 percent, respectively.

Even the market breadth turned in favour of declines. About 890 shares have advanced while 1353 shares declined on the Bombay Stock Exchange.

Infosys, Axis Bank, Maruti Suzuki, Reliance Industries, Coal India, Hindalco Industries, TCS and ONGC slipped into red. GAIL fell nearly 2 percent.

10:25am Market Outlook

The global environment is likely to get choppy in the coming months, and investors should not get exuberant because of the stimulus package announced by the ECB, says Saurabh Mukherjea of Ambit Capital.

The Greek elections will be one of the closely watched events, and Mukherjea says there is a good chance of an anti-Euro party coming to power.

But more important to market sentiment will be the events unfolding in China in the coming months, he said in an interview to CNBC-TV18.

Mukherjea sees the slowdown in China could triggering a devaluation of its currency yuan and even leading to it getting ‘unhooked’ from the dollar peg.

A devaluation in China could have spillover effects and lead to volatility in the currency markets, which in turn will have repercussions for the stock markets as well.

China’s Purchasing Manager Index (PMI) for manufacturing falling below 50 will be a sign of trouble not just for China, but also for the global economy, he says.

On India, Mukherjea says he expects the Sensex to touch 30,000 by March this year and 36,000 by March next year.

10:00am Market Check

The market remained strong, though there is some profit booking at higher levels. However, the broader markets underperformed benchmarks. Banking & financials and auto stocks led the market higher.

The Sensex climbed 313.53 points or 1.08 percent to 29319.55 and the Nifty jumped 83.15 points or 0.95 percent to 8844.55 whereas the BSE Midcap and Smallcap indices traded flat.

According to Deven Choksey of KR Choksey Securities, the market is likely to see both liquidity and volatility, and India is likely to see more fund flows on back of promises made by the government. “India will remain the centre point of focus”, he adds.

Nifty, he says would reconsolidate between 8400-9000 and should not break above 9000 in a hurry but move up in a staggered manner.

Housing finance company HDFC extended rally, up more than 4 percent by topping the buying list on the Sensex. Tata Motors, Larsen & Toubro and Sun Pharma rallied 2 percent each.

HDFC Bank, ICICI Bank, State Bank of India, Mahindra & Mahindra, Bharti Airtel, Cipla and Hero Motocorp gained 1-1.8 percent whereas GAIL topped the selling list, down 1 percent followed by Infosys and Dr Reddy’s Labs with marginal losses.

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