Equity benchmarks erased half of gains in late trade but closed higher for second consecutive session Friday, backed by banks on hopes of early NPA resolution. ITC and Reliance Industries also supported the market but gains capped by technology stocks.
The 30-share BSE Sensex rallied 208 points intraday, before closing up 89.24 points at 29,421.40. The 50-share NSE Nifty managed to hold 9100 level amid consolidation, up 21.70 points at 9,108.
Experts expect the Nifty to remain in a range of 9,000-9,200 levels next week as well, citing lack of triggers. According to them, next trigger for the market would be March quarter earnings that are expected to be good.
Jayant Manglik of Religare Securities expects consolidation to continue on Monday as well.
He says, now, the challenging part is to manage stock specific positions in such volatile scenario. Hence, he suggests limiting leveraged positions and keeping them hedged until Nifty resumes its uptrend.
For the week, the market reversed some gains on profit booking amid consolidation as investors awaited March quarter earnings due next month. The Sensex was down 0.8 percent and Nifty fell 0.6 percent.
Banks stocks hogged limelight after Finance Minister promised at IBLA award ceremony on Thursday that new policy for resolution of non-performing assets will be announced soon. PSU Bank gained the most, up more than 3 percent while Nifty Bank was up over a percent. Bank of India, PNB, Bank of Baroda, ICICI Bank and SBI surged 3-5 percent while HDFC Bank lost half a percent.
Oil marketing companies stocks fell nearly a percent on profit booking as well as weak expectations for fourth quarter earnings.
CLSA says barring any violent moves in the last week, Q4FY17 should see a notable 39-57 percent QoQ decline in recurring profit for oil marketing companies. This is driven by a QoQ fall in core gross refining margins, a decline in Indian oil consumption, large inventory losses after big gains in Q3 and a fall in the realised marketing margin on auto-fuels due to discounts on digital transactions. Reported net debt will also rise after the USD 3 billion dividend payout in Q4, it feels. Hence, the research firm remains negative on BPCL and HPCL.
Telecom operator Bharti Airtel was up 0.6 percent after the company said it would acquire Tikona Digital Networks’ 4G business for Rs 1,600 crore, which will boost its spectrum holding in Gujarat & Himachal Pradesh.
Yes Bank gained nearly 1 percent as its qualified institutional placement issue received good response, subscribed over 2.5 times.
Among others, ITC and Reliance Industries were up 1 percent each whereas TCS, Infosys, Lupin and Bajaj Auto fell around a percent.
The broader markets also closed off day’s high on profit booking. About 1,468 shares declined against 1351 advancing shares on the exchange.
Global markets were mixed amid uncertainty over a delayed vote on US President Donald Trump’s health-care bill. Japan’s Nikkei and Australia’s ASX 200 gained nearly a percent while European markets were moderately lower at the time of writing this article.