Nifty could be headed towards 6,080. But the market is turning extremely risky
 

News of the government deferring the implementation of the General Anti Avoidance Rules by two years and December headline inflation falling to a three-year low enabled the market close near the highs of the day. The market is on a short new rally with the Nifty expected to touch 6,080. However, the benchmarks are turning extremely risky. The National Stock Exchange (NSE) witnessed a volume of 66.98 crore shares and advance-decline ratio of 987:688.

The market opened firm on buying in IT and technology stocks continued following the upbeat revenue guidance by Infosys on Friday. Most markets in Asia were trading with gains on speculations that the Chinese government would raise the cap for foreign investors in the country’s financial markets.

The Nifty opened 16 points higher at 5,967 and the Sensex started the day at 19,689, up 25 points over its close on Friday. The opening figure on the Sensex was its intraday low while the Nifty dipped to a low of 5,962 in opening trade.

The market continued its upmove on brisk buying in IT stock continued ahead of the announcement of TCS’ quarterly earnings later in the day. However, the benchmarks pared a small part of its early gains following the release of the retail inflation numbers for December.

Retail inflation breached the double-digit mark at 10.56% cent in December compared to 9.90% in November and 9.75% in October. In urban areas, retail inflation rose to 10.42% in December from 9.69% in the previous month. The CPI (Consumer Price Index) for rural population increased to 10.74% during the month from 9.97% in November.

On the other hand, inflation based on wholesale prices declined marginally to 7.18% in December from 7.24% in November. It was 7.74% in December 2011. The third successive fall in inflation may prompt the Reserve Bank of India to cut interest rates in its policy review on 29^th January 29.

The benchmarks, which were trading sideways in subsequent trade, gained fresh momentum in noon trade as finance minister P Chidambaram deferred the implementation of the GAAR (General Anti Avoidance Rules) by two years to 1 April 2016. A firm opening of the key European markets also supported the gains.

The market continued its northward journey and hit its intraday high toward the end of the trading session. At the highs the Nifty touched 6,037 and the Sensex scaled 19,949.

The benchmarks closed near the highs with the Nifty gaining 73 points (1.22%) to settle at 6,024 and the Sensex surging 243 points (1.23%) to 19,906.

Among the broader indices, the BSE Mid-cap index advanced 1.20% and the BSE Small-cap index gained 0.74%.

The top sectoral gainers were BSE Realty (up 5.01%); BSE IT (up 2.57%); BSE TECk (up 2.37%); BSE Consumer Durables (up 1.80%); and BSE Oil & Gas (up 1.58%). BSE Auto (down 0.46%) and BSE Healthcare (down 0.06%) were the only losers.

Twenty of the 30 stocks on the Sensex closed in the positive. The chief gainers were ONGC (up 4.28%); Infosys (up 3.49%); Jindal Steel & Power (up 3.34%); TCS (up 2.14%) and HDFC (up 1.93%). The main lowers were Maruti Suzuki (down 1.72%); Cipla (down 1.23%); Bajaj Auto (down 1.14%); Tata Motors (down 0.65%) and  Mahindra & Mahindra (down 0.64%)..           

The top two A Group gainers on the BSE were—DLF (up 7.72%) and HDIL (up 5.80%).

The top two A Group losers on the BSE were—Jaiprakash Power Ventures (down 4.72%) and Pidilite Industries (down 2.65%).

The top two B Group gainers on the BSE were—Gujarat Automotive Gears (up 20%) and Nagreeka Exports (up 20%).

The top two B Group losers on the BSE were— Bhanot Construction & Housing (down 18.21%) and Beryl Drugs (down 14.81%).Houh       

Out of the 50 stocks listed on the Nifty, 37stocks settled in the positive. The major gainers were DLF (up 7.75%); ONGC (up 4.84%); HCL Technologies (up 4.70%); Jindal Steel & Power (up 3.70%) and Infosys (up 3.61%). The key losers were Lupin (down 1.65%); Bajaj Auto (down 1.41%); Maruti Suzuki (down 1.38%); Cairn India (down 1.20%) and Cipla (down 1.19%).

Markets in Asia, with the exception of the Straits Times, closed in the positive on hopes that the Chinese government would raise the limits on foreign investment in the country’s financial markets. However, volume was lower-than-normal as the Japanese market was closed for a local holiday.

The Shanghai Composite jumped 3.06%; the Hang Seng gained 0.64%; the Jakarta Composite climbed 1.78%; the KLSE Composite rose 0.11%; the Seoul Composite advanced 0.52% and the Taiwan Weighted added 0.06%. Bucking the trend, the Straits Times declined 0.31%.

At the time of writing, the CAC 40 of France was up 0.58%; the DAX of Germany was trading 0.72% higher and UK’s FTSE 100 rose 0.10%. At the same time, the US stock futures were mixed with a positive bias.

Back home, foreign institutional investors were net buyers of equities totalling Rs825.18 crore on Friday while domestic institutional investors were net sellers of shares aggregating Rs516.08 crore.

Electrical equipment maker Crompton Greaves today said it has completed the acquisition of the Compact Fluorescent Lamps (CFL) business of Himachal Pradesh-based Karma Industries for Rs145 million. The acquisition will double the company’s capacity in the fast-growing CFL lighting segment. Crompton Greaves jumped 3.49% to close at Rs120.05 on the NSE.

Foreign institutional investors have pared their stake to a three-year low in UB Group firm United Spirits, which is currently awaiting regulatory nod for sale of a majority stake to global liquor giant Diageo. As per the latest shareholding pattern data of the company, FIIs held 45.81% stake in Vijay Mallya-led UB group firm United Spirits as on 31 December 2012. The stock declined 1.24% to close at Rs1,874 on the NSE.

Bangalore-based Sonata Software has inked a deal with Qatar’s MEEZA to enhance cooperation in the area of Information and Communications Technology service delivery across Middle East North Africa (MENA) region, with immediate focus being Qatar. The partnership will help MEEZA tap into a vast pool of highly experienced and knowledgeable IT professionals across different areas, including Oracle and SAP, MEEZA said in a statement. Sonata gained 0.84% to close at Rs24.10 on the NSE.