Stock Market: Big boys pull out indices from abyss

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By S Jha

New Delhi, August 14: Indices sank in the early sessions to breach the psychological level of Nifty of 19300 ahead of the release of the retail inflation numbers. The consumer price index (CPI) went off the roof at 7.44 per cent for the month of July, which was way ahead of the street estimates.

The retail inflation number came after the market hour. Even while the street had been expecting a heated inflation number on the back of the sharp spike in vegetable prices due to the extraordinary prices of tomatoes, the CPI at 7.44 may further worsen the sentiments. The food inflation is also heated on the back of the price appreciation in the rates of rice and wheat, as well as flour. With inflation numbers remaining super charged, the bulls may run for cover in the truncated week in the stock market.

The early sessions saw the indices diving deep in the red following all round of rout in the frontline stocks, which constitute the indices. At one point only two scrips in Nifty and none in the Bank Nifty were in the green. The deep cuts in the indices were on account of the heavy selling by the foreign institutional investors in the cash market, as they accounted for a net sell of Rs 2324 crores in the cash market. The domestic institutional investors pitched in with a net buy of Rs 1461 crores in the cash market. It may be noted that the FIIs have been selling in the cash market for the past few days, which coincided with the hawkish stance of the US Federal Reserve.

But the pharma scrips first came in the game to help improve the sentiments as some of them such as Sun Pharma came in the green. Sonner, Infosys came in the game on Monday as the IT bellwether led the charge for the frontline stocks to stage a recovery for the indices. Reliance Industries too chipped in with a sharp rally in the late hour of the market to finally turn Nifty into green briefly before the index lost the gains to close with a minor cut. LT Mindtree shined the most on Monday as the latest addition in the Nifty 50 stocks made handsome gains.

With Infosys showing the way, IT stocks turned green in the second half of the session. Market participants claim that the fund houses are buying into the IT stocks amid anticipation that they are at attractive valuations.