Prashanth Tapse, Vice President (Research), Mehta Equities
Markets clung to solid gains as risk flow returned, with metals outshining the sectoral pack. The benchmark Nifty gained further ground joining the conga-line of firmer global stock across globe following a third straight positive day for Wall Street in overnight trade.
The gains came on reports that China is planning USD 75 billion infrastructure fund to revive economy. Interestingly, the gains came despite unambiguous FOMC minutes as it clearly suggested the Fed will do whatever it takes to tame inflation.
Technically speaking, if Nifty holds above its make-or-break supports at 15789 mark then the interweek trading theme could shift to ‘Enthused Bulls and Arrested Bears’.
Ajit Mishra, VP – Research, Religare Broking Ltd
Markets extended gains for the second consecutive session and rose nearly one percent. Supportive global cues triggered a gap-up start in the benchmark, followed by range bound move till the end. Meanwhile, all the sectoral indices contributed to the move wherein banking, financials, metals and realty were among the top gainers. On the benchmark front, the Nifty index settled around the day’s high to close at 16,132.9 levels. In line with the trend, the market breadth was also inclined strongly on the advancing side.
The recent uptick in the index has certainly eased some pressure but the key is to sustain amid mixed sentiment. Apart from the global markets, the focus will be on the IT major, TCS results for cues.
A decisive close above 16,200 in Nifty can further fuel the recovery. On the downside, the 15,800-15,900 zone would act as a cushion in case of any decline. Amid all, we reiterate our view to focus on sector-specific opportunities but avoid going overboard.
Gaurav Ratnaparkhi, Head of Technical Research, Sharekhan by BNP Paribas
The Nifty, with a gap up opening, surpassed 16000 mark on July 07. In terms of the Technical parameters, it has climbed above the 40 day exponential moving average & a falling trendline. It is attempting to fill up a gap area, which was created in June on the daily chart. Upper end of the gap area is 16172. The daily upper Bollinger Band is near 16200. These are key levels on the upside from short term perspective.
If the Nifty manages to scale above 16200 then it can head towards 16500. On the other hand, the level of 16000 will now offer support in the case of any dip
Anindya Banerjee, VP, Currency Derivatives & Interest Rate Derivatives at Kotak Securities:
USDINR spot closed 12 paise lower at 79.17 as newly unveiled measures from RBI improved sentiments and also falling oil prices boosted Rupee’s appeal.
Even though we do not expect any significant increase in capital flows over the near term but it will have a positive sentimental impact.
Once the risk appetite improves in global markets, foreign capital flows can increase in India. For the time being, we could see USDINR trade within a range of 78.70 and 79.50 on spot.
Rupak De, Senior Technical Analyst at LKP Securities:
The Nifty started to gap up and remained in a range throughout the day, keeping the morning gain intact. At the end of the session, the Nifty managed to close above its 50-day moving average, suggesting a bullish trend reversal.
The momentum indicator has been in a bullish crossover for the last few days, indicating ongoing bullish momentum.
Over the short term, the headline index may move towards 16400 if it sustains above 16100. On the lower end, support is visible at 16000.
Shrikant Chouhan, Head of Equity Research (Retail), Kotak Securities:
Buoyancy across global indices and short-covering in local stocks helped benchmark Nifty & Sensex to close above their psychological levels. After the sell-off in recent months, valuations are now off their peak and this is giving investors some room to pick & choose stocks which are fundamentally sound despite the prevailing negative sentiment.
Technically, after a promising pullback rally the Nifty is comfortably trading above the 16000 mark which is broadly positive. However, post the strong uptrend rally, the market, on daily charts, has formed a small Hammer candle which is indicating a strong possibility of an intraday correction.
As long as the index is trading above 16000, the short term uptrend formation remains intact. Above 16000, the index could hit the level of 16200-16275. On the flip side, traders may prefer to exit from long positions, if the index trades below 16000. On further correction, the index could retest the level of 15950-15900.
Vinod Nair, Head of Research at Geojit Financial Services
Domestic bourses mirrored an upbeat mood in global equity markets as investors digested the latest FOMC minutes while falling crude and commodity prices lifted investor sentiments.
This upside momentum could dominate the markets in the near-term, underpinned by hopes of reducing inflation. The RBI’s latest slew of measures to boost foreign exchange inflows is expected to aid the tumbling rupee.
S Ranganathan, Head of Research at LKP securities:
The penultimate day ahead of the earnings season witnessed buoyancy as Bulls pressed the accelerator with the south-west monsoon lashing the financial capital. Financials led the rally with the market breadth showing a marked improvement as several stocks in the Small & Midcap space saw keen investor interest.
Cooling Oil prices coupled with the progress made by the Monsoon has now set the stage for the first quarter earnings beginning tomorrow.
Rupee Close:
Indian rupee closed 13 paise higher at 79.17 per dollar against Wednesday’s close of 79.30.
Market Close: Benchmark indices ended higher for the second consecutive session on July 7 with Nifty closing above 16,100.
At close, the Sensex was up 427.49 points or 0.80% at 54,178.46, and the Nifty was up 143.10 points or 0.89% at 16,132.90. About 2201 shares have advanced, 1013 shares declined, and 146 shares are unchanged.
Hindalco Industries, Titan Company, Tata Steel, JSW Steel and Larsen and Toubro were among the top Nifty gainers. Dr Reddy’s Laboratories, HUL, Cipla, Bharti Airtel and Nestle India were among the losers on the index.
Except FMCG all the sectoral indices ended in the green with Metal and PSU Bank indices gained 3-4 percent.
The BSE midcap and smallcap indices gained over 1 percent each.
Jefferies On Shriram Transport Finance Corporation
Broking house Jefferies has maintained underperform rating of Shriram Transport Finance Corporation with a target at Rs 990 per share.
With shareholder approval, merger seems on track for October 2022 completion. The merger may have synergy benefits, but the extent these can be realised, is uncertain.
The normalisation of credit cost should lift FY23 earnings.
The risk of potential equity supply from shareholdeers of merged comapny can be an overhang, reported CNBC-TV18.
CLSA View On Godrej Consumer Products
Broking house CLSA has maintained outperform rating on Godrej Consumer Products with a target at Rs 890 per share.
The company is likely to report 8% topline growth with 10% growth in India & 6% in international business.
In India, home care reported a decline, while personal care saw double-digit growth. Africa cluster sustained double-digit growth, while pressure in Indonesia continued.
CLSA see a 200 bps contraction in its EBITDA margin to 17.8%, reported CNBC-TV18.
