Sensex starts on a cautious note; Nifty50 holds above 8,650


NEW DELHI: The S&P BSE Sensex started on a flat note with a positive bias in morning trade on Wednesday, led by gains in HDFC, Adani Ports, M&M, SBI, and RIL.

The Nifty50 pared morning gains but was still trading above its crucial level of 8,650 supported by gains in realty, power, oil & gas, metal, capital goods, and banking stocks.

At 09:20 am, the 30-share index was trading at 28,049, down 35 points or 0.13 per cent. It touched a high of 28,143.28 and a low of 28,049.82 in morning trade. The Nifty50 was trading at 8,661 down 17 points or 0.2 per cent. It touched a high of 8,690.10 and a low of 8,658.20 in the first 30 minutes of trade.

The S&P BSE Midcap Index was down 0.05 per cent and BSE S&P Smallcap Index was trading 0.14 per cent higher.

Adani Ports (up 4 per cent), ONGC (up 0.6 per cent), Hero MotoCorp (up 0.6 per cent), CIL (up 0.43 per cent), and SBI (up 0.43 per cent) were the major Sensex gainers. ITC (down 0.8 per cent), Dr Reddy’s Laboratories (down 0.76 per cent), Cipla (down 0.6 per cent) and Maruti Suzuki (down 0.4 per cent) were the major Sensex losers.

M&M, Adani Enterprises, Adani Transmission, Indiabulls Realty, Chambal Fertiliser, Corporation Bank, Punj Lloyd, Finolex Cables and Thermax are some of the companies that will announce their June quarter earnings during the day.

Here’s a list of factors which are influencing the market sentiment today:

Cues from Singapore positive: At 07:45 am, Nifty50 futures on the Singapore Stock Exchange were trading 7 points higher at 8,714, indicating a flat opening for the domestic market.

“The market seems to be factoring in a lot of the positives in terms of news flows, be it from the monsoon or from the reforms side. If you look at the broader market, the Nifty50 is trading close to about 16 times FY18 earnings,” said Shibani Sircar Kurian, VP & Head of Research, Kotak Mutual Fund.

Banking stocks need to perform: For any upside, heavyweight banking stocks may require to perform well, said experts.

“When we compare the Nifty50 and the Bank Nifty, the former has actually moved ahead and exceeded its recent resistance and has formed a higher high formation. But Bank Nifty has not been able to exceed its resistance. So this has developed a divergence pattern. As long as Bank Nifty does not close above 19,100, we will not see that momentum
coming into the market,” said Manav Chopra, Head – Technical Analyst, Monarch Networth Capital.

Earnings to trigger stock-specific action: A handful of companies are going to announce their March quarter earnings during the day; among them are M&M, Adani Enterprises, Adani Transmission, Indiabulls Realty, Chambal Fertiliser, Corporation Bank, Punj Lloyd, Finolex Cables and Thermax.

The trading week will see 1,300-odd BSE-listed firms announcing their quarterly earnings. As many as 163 firms will announce their June quarter results on Saturday.
Interest rates may still slide: The Reserve Bank of India kept the policy rate unchanged at 6.5 per cent on Tuesday, but Nirmal Jain of IIFL believes interest rates are still going to head downward for reasons, including benign liquidity supply.

“A lot of FII money is coming in through equity investment even through debt, masala bonds and all other means. Interest rates are expected to go down and there is no surprise there. Equity markets have moved up very sharply in last few weeks. So a corrective phase, whenever it is, would always be healthy,” Jain said.

Asian markets stay negative: Most Asian markets were trading lower this morning. Japan’s benchmark Nikkei was trading 0.32 per cent lower at 16,715. China’s CSI300 fell 0.11per cent to 3,252.90. Other Asian indices, including Hong Kong’s Hang Seng (up 0.46 per cent), South Korea’s Kospi (flat) and Taiwan’s TWSE (down 0.12 per cent), were trading mixed.

US markets ended flat on Tuesday: The Dow Jones industrial average index edged 3.76 points, or 0.02 per cent, higher at 18,533.05. The S&P500 index inched 0.85 point, or 0.04 per cent, at 2,181.74 and the Nasdaq Composite index gained 12.34 points, or 0.24 per cent, to 5,225.48. MSCI’s all-country world index rose 0.5 per cent and touched its highest level since late August of 2015, Reuters reported.