Equities advance to 16-month high; 5100 on Nifty eyed

Equity benchmarks resumed their rally Tuesday after an extended week, building onto gains for the fifth straight session. Expectations of strong quarterly earnings and increased short covering ahead of the F&O expiry for September propelled key indices to 16-month highs.

“The market opened on a strong note defying global market movements. Indices held gains throughout the day even as we saw some amount of profit booking as the Nifty neared 5050 – a crucial resistance. However, we expect the Nifty to scale to 5100 levels in the near term. On a sector specific note, automobile, technology and power stocks will outperform,” said Jyoti Nagrani, chartered market technician, Finquest Securities.

National Stock Exchange’s Nifty settled well above the 5000 mark for the first time in 16 months. The index ended at provisional 5020.20, up 0.89 per cent or 44.15 points from its previous close. The index touched a high of 5036.30 after opening at 4977.10.

Bombay Stock Exchange’s Sensex moved closed to the 17000 mark as well. The 30-share index advanced 0.87 per cent or 145.13 points to 16,886.43. The index rose to a high of 16,943.49 from a low of 16,763.78.

Midcaps and smallcaps picked up pace as well. The BSE Midcap was up 0.74 per cent and BSE Smallcap Index climbed 1.05 per cent.

Sectorwise, the BSE IT Index surged 1.91 per cent, followed by BSE FMCG Index up 1.63 per cent and BSE Bankex rising 1.03 per cent. Meanwhile, BSE Oil&Gas Index ended marginally lower.

Biggest Nifty gainers were Ranbaxy Laboratories (5.56%), HDFC (4.78%), BPCL (3%), ITC (2.89%) and TCS (2.84%).

Losers were Bharti Airtel (-3.44%), Hindalco Industries (-1.16%), Jindal Steel (-1.10%). ONGC (-0.85%) and Sterlite Industries (-0.66%).

Shares of Bharti Airtel fell more then 3 per cent following reports that the company may have to sweeten its offer for South African telecom company MTN. According to reports, Bharti has offered MTN a 27 percent of its stake for the same money instead of the 25 percent proposed earlier.

Market breadth remained positive with 1632 advances against 1045 declines on the BSE. On NSE, there were 698 advancing shares outnumbering 592 declining ones.

Meanwhile, Reliance Communications' infrastructure subsidiary, Reliance Infratel, is planning an initial public offer and the company will shortly file its Draft Red Herring Prospectus with Sebi, chairman Anil Ambani told shareholders at the company's annual general
meeting.

The company is mulling a 10 per cent stake sale of equity of Reliance Infratel through an IPO. 85 per cent of the stake ofthe company will remain with Reliance Communications, Ambani added.

Source: EconomicTimes