Traders Cautious ahead of Rs.120 bn NTPC FPO - Consortium

Nifty declined by half a percent to close at 5956.90. Indian market was moving in a narrow rage despite other Asian markets being lower by 1-2% amid renewed concern about Europe's debt crisis. The market marginally recovered from the intra-day at the end of the day after European and US Future gained. Traders were in cautious mood on account of Rs120bn mega NTPC FPO this week. There was stock specific activity in the market.

Cement stocks witnessed smart rally on ahead of cement price increased. Both ACC and Ambuja Cement gained by 2% and 3% respectively. United Spirits gained by 2% Sebi clears Diageo's open offer for United Spirits.

FMCG, Metal, Capital Goods and Oil & Gas stocks witnessed sharp declined. PSU Banking stocks witnessed fresh buying. SBI has gained by 1% to close at Rs2371 after touching day's low of Rs2328. Others like Allahabad Bank, Dena Bank and Bank of India witnessed sharp rally from intra-day low. However private banks like Axis Bank, ICICI Bank and Yes Bank declined by 1-2% each. Metal stocks declined due to fall in base metal price on LME (Index down 0.7%). Sterlite declined by 2% to close at Rs108. Others like JSW Steel, Tata Steel and Jindal Steel declined by 1-2%.

Pharma stocks witnessed fresh buying (Index up 0.9%). Sun Pharma surged by 4% to close at Rs750. Sun Pharma got FDA approval for copy of J&J cancer drug Doxil unit. Taro Pharmaceutical yesterday reported profit rose 42% Y/y to $88.8m in qtr ended Dec. 31. Both Biocon and Ranbaxy gained by 3% and 2% respectively.

For the day coming by, Indian markets are expected to open on a positive amid constructive global cues. Asian shares are trading higher today after Wall Street rebounded on solid U.S. earnings and data showed the global economy continuing to improve. U.S. stocks climbed on Tuesday, recovering a day after the market's biggest sell-off since November, buoyed by stronger-than-expected earnings and data showing further expansion in the massive U.S. services sector.

FIIs cash buying seems moderating and they sold heavily in index futures. However, good buying was witnessed in stock futures. So they are focusing on individual stocks. Technically, yesterday 5940 was defended which is important as being previous swing low. On the upside Nifty faces multiple resistances at 5970/5980/6015.

Source : Equity Bulls

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