The rally of the first two days of the year is now mature. The Nifty has to break above 6,016 for the rally to continue. If not expect a sharp correction
 

Gains in oil & gas, technology and IT stocks as well as global cues resulted in the market closing higher for the third day. The rally of the first two days of the year is now mature. The Nifty has to break above 6,016 for the rally to continue, else we may see a sharp correction. The National Stock Exchange (NSE) saw a volume of 79.70 crore shares and advance-decline ratio of 1048:711.

The market opened in the positive tracking firm global cues as the US budget deal was cheered by investors worldwide. The US markets closed with gains of 2%-3% as the country’s policymakers struck a last-minute deal to avert tax increases and spending cuts. Reflecting the US trend, markets in Asia were higher morning trade today.

The Nifty opened 23 points up at 6,016 and the Sensex resumed trade at 19,771, a rise of 57 points over its previous close. Gains in metal, oil and gas and capital goods sectors took the market higher in opening trade. The upmove led the market to its high in initial trade. At the highs the Nifty rose to 6,017 and the Sensex climbed to 19,786.

However, profit taking pushed the benchmarks into the negative for a brief moment wherein they touched the day’s lows. At that point, the Nifty slipped to 5,987 and the Sensex fell to 19,693. Resumption in buying enabled the market regain its momentum in the morning trade.

A high degree of volatility saw the indices moving lower once again in noon trade, but continued to remain in the green. Concerns about budgetary issues in the US, after the House of Representatives on Tuesday voted on a Senate backed bill to avoid a “fiscal cliff”, kept investors on guard.

Support from oil & gas, technology and IT stocks enabled the market settle higher for the third day in a row. The Nifty rose 16 points (0.27%) to 6010 and the Sensex settled at 19,765, up 51 points (0.26%).

The broader indices outperformed the Sensex today. The BSE Mid-cap index advanced 0.77% and the BSE Small-cap index climbed 0.93%.

The top sectoral gainers were BSE Oil & Gas (up 1.37%); BSE TECk (up 1.32%); BSE IT (up 1.10%); BSE Realty (up 1.09%) and BSE PSU (up 0.48%). The main losers were BSE Fast Moving Consumer Goods (down 0.50%); BSE Consumer Durables, BSE Capital Goods (down 0.38% each); BSE Bankex and BSE Auto (down 0.09% each).

Fourteen of the 30 stocks on the Sensex closed in the positive. The chief gainers were Dr Reddy’s Laboratories (up 2.35%); Bharti Airtel (up 1.99%); ONGC (up 1.95%); Reliance Industries (up 1.51%) and Infosys (up 1.24%. The losers were led by Tata Power (down 1.39%); Sun Pharmaceutical Industries (down 1.09%); Maruti Suzuki (down 0.95%); Hero MotoCorp (down 0.87%) and HDFC Bank (down 0.74%).

The top two A Group gainers on the BSE were—Muthoot Finance (up 10.21%) and Indiabulls Financial Services (up 6.67%).
 

The top two A Group losers on the BSE were—NMDC (down 3.13%) and Bata India (down 1.84%).

The top two B Group gainers on the BSE were—Sandur Manganese & Iron Ore (up 20%) and Zodiac Clothing Company (up 20%).
 

The top two B Group losers on the BSE were—Winsome Textile Industries (down 10.73%) and Tuni Textile Mills (down 9.98%).

Out of the 50 stocks listed on the Nifty, 26 stocks settled in the positive. The main gainers were Cairn India (up 2.44%); Dr Reddy’s Labs (up 2.36%); Bharti Airtel (up 2.29%); ONGC (up 1.97%) and Infosys (up 1.63%). The key losers were Tata Power (down 1.56%); Punjab National Bank (down 1.27%); Lupin, Sun Pharma (down 1.20% each) and Hero MotoCorp (down 1.12%).

The Asian pack, with the exception of the Seoul Composite, settled higher on the back of positive economic indicators in the US and China. The Institute for Supply Management’s US factory index rose to 50.7 in December from 49.5 in the previous month. At the same time, China’s non-manufacturing purchasing managers’ index rose to 56.1 in December from the previously reported 55.6 in November.

The Hang Seng gained 0.37%; the Jakarta Composite surged 1.21%; the KLSE Composite climbed 1.07%; the Straits Times advanced 0.72% and the Taiwan Weighted settled 0.74% higher. Bucking the trend, the Seoul Composite declined 0.58%. Markets in China and Japan resume trade on Friday after the New Year holidays.

At the time of writing, the key European markets were trading lower and the US stock futures were marginally in the negative.

Back home, foreign institutional investors were net buyers of shares totalling Rs1,107.67 crore on Wednesday whereas domestic institutional investors were net sellers of stocks amounting Rs417.40 crore.

Jet Airways today said it is in talks for a potential stake sale to UAE-based carrier Etihad and various deal structures are being explored to ensure compliance to the regulatory requirements. However, the Indian carrier maintained that the final terms of the deal have not been finalised and there cannot be a “firm time-line” as to the progress of talks. The stock jumped 4.79% to settle at Rs607.60 on the NSE.

Leading infrastructure firm Punj Lloyd today said its subsidiary Sembawang Engineering and Constructors Pte Ltd has made an offer to acquire the construction business of Australia’s Macmohan Holdings. The offer has been made in two parts through a wholly-owned subsidiary, Sembawang Australia Pty Ltd, the company said in a statement. The stock gained 0.73% to close at Rs61.85 on the NSE.

ITD Cementation India today said it has got a Rs546 crore order, along with its Thailand-based parent firm, from Delhi Metro Rail Corporation (DMRC) for the construction of a 9,035 metre long elevated metro track. The project includes construction of a 9,035 metres long elevated metro track along with eight elevated stations. ITD Cementation gained 1.52% to close at Rs253.90 on the NSE.