market analysis: Market Movers: Unseasonal spurt in AC stocks; 15 stocks in overbought zone

Shares of Amber Enterprises, Voltas, Blue Star and Johnson Control-Hitachi hogged the limelight on Friday after the government banned import of air conditioners. IT major HCL Technologies kept buzzing after delivering better-than-expected financial results for September quarter. However, the scrip ended the day in the red.

Overall, the benchmark equity indices recovered from the big losses suffered in the previous session, with banking and financial stocks leading the rally. The 30-share BSE Sensex settled 0.64 per cent up at 39,982, while the 50-share Nifty closed 0.70 per cent higher at 11,762.

Joseph Thomas, Head of Research at Emkay Wealth Management, said, “After Thursday’s storm all major markets, the domestic market remained calm today. But factors that are providing ammunition to the intermittent volatility still remain active and potent.”

That said, here is a lowdown on what happened in Friday’s session:

IDBI Bank shares soar
Shares of IDBI Bank rallied nearly 16 per cent to Rs 38 after a report that the government would seek in-principle approval from the Cabinet Committee on Economic Affairs (CCEA) on lowering its 47.11 per cent stake in IDBI Bank, after which the structure of the sale will be determined.

AC stocks rally
Shares of Amber Enterprises rallied nearly 9 per cent to Rs 2,180 after the government imposed a ban on the import of air conditioners with refrigerants. Voltas, Johnson Control-Hitachi Air Conditioning, Blue Star also advanced between 4-5 per cent to Rs 700, Rs 2,278 and Rs 637, respectively.

It’s sell on news for HCL Tech
Despite encouraging Q2 results, shares of the IT major declined over 3 per cent to Rs 827, but analysts brushed it off as a sell-on-news scenario and advised investors to focus on long-term growth. HCL Tech shares are up more than 40 per cent on a year-to-date basis. The company reported 18.5 per cent year-on-year (YoY) growth in net profit at Rs 3,142 crore for September quarter against analysts’ estimate of Rs 3,033 crore.

HDFC Bank gains ahead of results
Shares of HDFC Bank advanced 2.55 per cent to Rs 1,199 ahead of its earnings for the quarter ended September 30. Brokerage IIFL Securities said asset quality of the bank is likely to remain stable QoQ and gross non-performing assets may stand at 1.40 per cent. It expects 17 per cent YoY growth in net profit, 15 per cent rise in pre-provision profit and 18 per cent expansion in net interest income.

Broader indices outperform
Buying was not limited to index stock alone, but small and midcaps also witnessed good interest from market participants. The BSE Midcap index rose 1.05 per cent, aided by gains in IDBI Bank, Kansai Nerolac and Jindal Steel and Power, while the BSE Smallcap index added 0.97 per cent on buying in Alankit, Mahindra EPC Irrigation and Avadh Sugar.

Stocks at 52-week high
Some 26 stocks scaled 52-week highs on BSE. They included 8K Miles, Bafna Pharma, Bal Pharma, Hero MotoCorp, JSW Steel and JK Cement, among others.

Stocks that hit upper circuits
As many as 199 stocks rose by their daily limit on the BSE. They included Dish TV, Shree Renuka Sugars, Sintex and JMT Auto, among others.

Stocks that turned ‘overbought’
As many as 15 stocks turned ‘overbought’ as they crossed above the 70-mark on the RSI indicator. They included Ambuja Cements, Just Dial, Hero MotoCorp, IFB Industries, Bal Pharma, Shakti Pumps and Responsive Industries, among others.

Most active counters
With a total traded quantity of 12.27 crore shares, Vodafone Idea emerged as the most active stock on the NSE in terms of volume. It was followed by Tata Motors (6.25 crore), YES Bank (6.04 crore) and Ashok Leyland (4.69 crore). On the other hand, HCL Technologies (Rs 2,423 crore), Reliance Industries (Rs 2,188 crore), Infosys (Rs 2,054 crore) and Bajaj Finance (Rs 1,640 crore) stood among most active in terms of value.

Where is Nifty headed?
Nifty formed a small bullish body with a long lower shadow after taking support at the previous day’s low of 11,660 making a double bottom at this crucial support zone. Aditya Agarwala, Senior Technical Analyst, YES Securities, said if the bulls manage to take the index beyond the crucial resistance of 11,800, then a short-covering rally would extend it to 11,870-11,935 levels. But if the bears manage to push the index below the key support at 11,660 level, then fresh selling pressure may drag it to 11,600-11,550 levels.

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