Nifty continued to rally and breached 7900 after Jan 4

Nifty continued to rally and breached 7900 after Jan 4th with good buying in IT, Telecom, Realty and Infrastructure. Nifty managed to close above 7900 with Infosys from the IT sector as major gainer adding almost 6% in pockets while IDEA from Telecom and HDIL from realty added the same as well. Benchmark index is in buying momentum and further can be seen as recent Infosys numbers, Good monsoon projection, and decline in March WPI numbers at -0.85% encouraged investors as well.

Nifty may see some supply at 7950- 7980 level going forward and if manages to breach it we will open gates for higher levels. In coming sessions a lot of banks will be coming out with their numbers and we will be looking at them critically as Bank Nifty has higher weightage in the index.

LIC numbers were well received with jump in profit by 18.5% to 448 cr. Though, due to slippages and jump in Tax expenses coupled with higher provisions the pressure was seen at bottomline. Though topline we expect stock to do better as interest rates gets trimmed in an economy coupled with improving margins due to jump in demand we may see LIC as promising bet in Housing space.

TCS result will be interesting to watch as Infy at 2nd number has outperformed the industry growth and are upbeat on dollar guidance as well. Huge penalty that amounts to nearly $1 BN will impact its earnings from healthcare sector while a decline in BFSI sector is already affecting the IT space. IT will be critical to see their guidance. Further loss from Chennai floods may also impact.

The stock is in a downward momentum on a longer time frame chart and will be crucial to see if it breached 2700 – 2400 range post Q4 numbers.

​By Mustafa Nadeem, CEO, Epic Research Pvt. Ltd.