Stock Market: Hot money tests equity strength; Big boys shrug off fear factor

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By S Jha

New Delhi, October 3: Nifty on Tuesday held the 19500 level after taking a knock of over 100 points. The foreign funds stay on dumping Indian equities, netting a sale of over Rs 2000 crores on Tuesday. Their domestic counterparts are trying to match by buying into the equities to bring stability in the markets.

The US bond yields are sharply rising, being at a multi-year high, to send the equity markets in the grips of bears. Bond yields, strong dollar, rallying crude oil are the three macro factors guiding the direction of the market. With the monetary policy committee of the Reserve Bank of India beginning deliberations from Wednesday and the US Fed commentary on rates likely this week, the bears are hoping to stay with upper hands on the bourses, while the advance and decline ration is also favouring the shorters.

Yet, street is discovering stocks for momentum gain as two heavyweights – Larsen and Toubro and Bajaj Finance – continued unfazed to extend gains on the bourses. Larsen and Toubro, which as per chartists had given a massive breakout last month, strongly gained in the Tuesday session by touching the level of Rs 3075. The gains in the construction major came on the back of the company bagging fresh large orders. With L&T also tapping into the defence sector, L&T has emerged as a hot stock on the bourses, rising to the record level in the last few months.

Bajaj Finance on the back of the management decision to raise the war chest to strengthen its leadership position in the non-banking finance space is now close to touching the level of Rs 8000. The scrip touched the level of Rs 7975 level in the Tuesday session. It may be recalled that Bajaj Finance had gone past Rs 8000 about two years ago and afterwards the scrip had slid back into the Rs 6k space.

The market weakness was also supported by weak Reliance Industries, which continue to languish at the support level. While the banking index gained with the gains in the PSU banks, with Punjab and National Bank leading the gains, the private banks remained under the grips of the bear.

As mentioned earlier by The Raisina Hills, Map My India, which as per chartists has broken out, closed above 62-week high on Tuesday along with Avantel, which is also buzzing ahead of the meeting of the board of the company. Both the scrips closed the day above all-time high levels.

(Disclaimer: Investment decisions should be made in consultation with SEBI-registered advisors)