Markets post modest gains, eye on inflation

Markets opened marginally higher following modest gains across Asia and short covering. The The S&P CNX Nifty was up 20 points, at 5,503 and the benchmark Sensex gained 62 points, at 18,327.

Derivative Analyst Shshank Mehta said that long positions were formed in the Nifty future yesterday which has led to the positive opening along with firm cues from Asia. Markets may remain volatile ahead of the May inflation data which will be out at noon today. Reuter’s poll expects Whole Sale Price Index at around 8.6% which may prompt the Reserve Bank of India to continue with its rate hike of around 25 bps later this week.

Ashish Chaturmohta, Vice President - Derivatives and Technical Analyst from IIFL wealth said, if Nifty sustains above 5440 levels with volume support we may see some pullback, whereas on the downside, a close below 5400 levels would be crucial for the market.

Markets across Asia also posted modest gains in the morning session. China’s Whole Sale Price Index was reported in line with expectations around 5.5% for May compared to 5.3% in April. Shanghai Composite advanced 0.9% and Hong Kong’s Hang Seng gained 0.3%. Japan’s Nikkei Stock Average was up 0.2%.

Among individual stocks HDFC fell 0.7% after Citigroup reduced stake in the company from 11.4% to 11%. Idea Cellular advanced 1.7% after it reported net profit of Rs 274 crore in the fourth quarter as against Rs 266.61 last year.

Rate Sensitive auto shares were leading the losses in the mornign session, the BSE Auto index was down 0.1%. Tata Motors declined 1.6%, Maruti Suzuki fell 0.8% and Ashok Leyland was off 0.2%.

BSE Realty shares were leading the gains, up 1%. HDIL climbed 1.6%, DLF was up 1.5% and Ackruti City added 1.4%.

From the broader markets, the midcap and the smallcap indices were up 0.5% each.

Among the Sensex stocks, DLF gained 1.5%, ICICI Bank gained 0.9% and Larsen & Tourbo was also up 0.9%. Top losers on the Sensex were Tata Motors, down 1.6%, HDFC fell 0.9% and Maruti declined 0.8%.

Market breadth was positive, 972 stocks advanced for 347 stocks which advanced.