Taking Stock | Market hitches ride on Maruti's strong Q2 showing; Sensex just shy of 60k, Nifty above 17,700

The Indian equity benchmarks, which were trading cautiously amid uncertainty over the out-of-turn Reserve Bank of India meeting on November 3, picked up speed in the last hour on better-than-expected results from the index heavyweight Maruti Suzuki.

At close, the 30-pack BSE Sensex was up 203 points, or 0.34 percent, at 59,960, while the broader Nifty gained 49.85 points, or 0.28 percent, to close at 17,887.

Despite negative global cues, the Indian market managed to close in the green on the back of strong quarterly earnings by the index heavyweights.

“Gains in index heavyweights helped the domestic market to withstand its gains despite negative trends in its global peers as US tech stocks had a significant sell-off following disappointing quarterly results and a bleak forecast”, said Vinod Nair, Head of Research, Geojit Financial Services.

“A stronger rupee along with a softening treasury yield and decent Q2 earnings results are supporting the domestic market in the near term,” he said.

Despite a strong closing, strength was not visible across sectors. Barring Nifty auto and oil & gas, all sectoral indices ended the day in the red.

Strong quarterly showing by Maruti Suzuki pushed the auto index higher by 1.63 percent, while oil & gas index gained over a percent.

India’s largest passenger car manufacturer today declared a four-fold increase in its standalone net to Rs 2,061.5 crore and closed 5 percent higher.

Nifty metal and pharma were the top losers, down 1.4 percent each. The Nifty IT was down under a percent. Banks, financials and realty lost close to 0.5 percent each.

Maruti Suzuki, Reliance, Apollo Hospital, NTPC and Hero Motocorp were the top Nifty gainers, up 1.5 to 5 percent.

The top losers included Tech Mahindra, Tata Steel, Grasim, Sun Pharma and Divis Labs, ending 2 to 2.5 percent lower.

Stocks & Sectors

On the BSE, the BSE Auto index was the top gainer with a gain of 1.66 percent while the BSE Energy index was up 1.2 percent. The BSE Oil & Gas index gained 0.76 percent today.

BSE Metals was the top losing sector on the BSE as it shed 1.44 percent while IT and Bankex were down close to 0.7 percent each.

The broader indices ended on a mixed note with BSE Midcap losing 0.4 percent and BSE Smallcap was down 0.6 percent.

A long build-up was seen in the stocks of Maruti, Honeywell Automation and Reliance while a short build-up could be seen in Balrampur Chini, SBI Card and SAIL.

Among specific stocks, a volume spike of 95 percent was seen in Honeywell Automation, ~80 percent in BHEL and a spike of 50 percent in SBI Cards.

Outlook for October 31

Prashanth Tapse – Research Analyst, Senior VP (Research), Mehta Equities Ltd

Markets raced ahead as bulls were seen enthusiastic with immediate inter-week goal posts for Nifty seen at the psychological 18000 mark. Above 18000, the benchmark Nifty will aim its all-time-high at 18605 mark.

The positive takeaway was that the bulls shrugged off the fact that the Fed will almost certainly issue a fourth-straight 75 basis point rate increase at its policy meeting scheduled on November 2. For Nifty, the immediate hurdle is seen at 18100, while support is seen at 17407-17589.

Gaurav Ratnaparkhi, Head of Technical Research, Sharekhan by BNP Paribas

The Nifty has been trading near the 78.6% retracement of the entire September decline throughout the last week. The key Fibonacci level is near 17800.

The hourly chart shows that the index is in process of forming a distribution near this key hurdle. The hourly momentum indicator has developed a negative divergence, which is a sign of exhaustion.

The overall structure shows that the next move down could be around the corner. The immediate support zone is at 17720-17700. Once that is breached then the index can tumble towards 17500 in the short term.

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Disclosure: Moneycontrol is a part of the Network18 group. Network18 is controlled by Independent Media Trust, of which Reliance Industries is the sole beneficiary.

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