Stock Market: Defence play drives into fast & furious lane

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By S Jha

New Delhi, July 11: The top speed start to the bourses lost steam in the second half on Tuesday amid the investors keeping their fingers crossed over the likely cues emerging from the US later this week. Yet, the Nifty crossed the psychological level of 19500 level during the day before erasing significant amount of gains amid heavy profit booking in the heavyweights.

Bank Nifty pulled down the broader market after the index went sideways erasing gains of more than 260 points to dive with cuts of over 150 points during the day. The indices are said to be in the sideways mode, and the Nifty level of 19500 is being watched out by the bulls and bears for the possible directional cues.

The US economists have stated that they see the beginning of the end of the inflation battle, raging for over two years, which had set the American bourses on the higher trajectory a day before. The battle against inflation may not be decisively won, for the US Federal Reserve has so far maintained hawkish stance.

But the steady fund flow from the institutional and retail investors is keeping the street buzzing. The initial fears that the Nifty may retrace the level of 18950 in a throwback is now fast receding, as funds keep pouring in the cash markets, principally led by the foreign institutional investors. The mutual fund flow also remains robust.

Defence sector firms listed on the bourses are on the fast and furious lane. There is no stopping them as they keep soaring day after day. India-US pacts on defence cooperation is rubbing positively on the defence sector listed companies with the China factor playing out.

Avantel, a satellite communication with stakes in the defence sector, is on a stellar run. After retracing almost 10 per cent last week from its week, the scrip remains true to its nature of scaling higher than the previous peak after each fall. It soared almost 13 per cent on Tuesday to touch Rs 872 level.

The Raisina Hills has been keeping the readers posted of the anticipation among the investors for a major turnaround in the shipbuilders as India and the US joint statement in its paragraph 14 committed to host the American ships for repair and maintenance works, which invariably last for six months and more.

After Mazgaon Dock Shipbuilders flew over the roof with back to back 10 per cent circuit, Cochin Shipyard and Garden Reach Shipbuildrs, a Kolkata-based PSU, joined the show on Tuesday gaining strongly, 10 per cent and six per cent respectively.