Stock Market: Inflation on retreat, smart money drives equities

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By Our Special Correspondent

New Delhi, April 13: Each passing day reaffirms that inflation is on the retreat. Inflation is not only receding in India, but also appears to be losing the steam in the US. Dow Jones strongly came back in the Thursday session, rising by more than 278 points in the afternoon session, slowly climbing towards the all-time peak.

Bank Nifty came to the party on Thursday, as AU Small Finance Bank sharply spiked by over 17 per cent to bring cheers in the index. The banking heavyweights SBI, ICICI Bank, Axis Bank, Kotak Mahindra Bank also joined the momentum show to give a heavy lift to the Bank Nifty, which closed with over 500 points of gains.

Nifty, which came under pressure due to heavy selling in the IT stocks, recovered all losses in the day to end the session with a minor gain. Thursday being the expiry day for the weekly options, the Bank Nifty gained the most on account of short covering.

Nifty is now trading above 17800 level, and the 50-share index is now being said to have entered a strong zone. The broader market also did well, helped by the wider retail participation, which continues to lap heavy beaten stocks. The likes of Mangalam Organics, which had lost over 60 per cent from the peak, gained 20 per cent on Thursday.

Avantel, a satellite communication firm, trended strongly with gains of over seven per cent to trade at an all time peak now of Rs 398. Data Patterns, another private defence player, continues to trend up, making all time high on a daily basis. The market participants are eagerly awaiting the quarterly results of the defence scrips, because they have been sitting on massive order books from the government agencies.

Infosys disappointed the street with below par quarterly performance. This came on the back of TCS also missing the street expectations. The IT stocks were punished, as most of them lost about two per cent on Thursday. With the US slowly walking into recessionary situation, IT stocks have predictably been bearish. Infosys ADR was down by over nine per cent, tracking the weak numbers in the March quarter. The Wipro ADR is also severely punished.

With inflation trending lower, the rate sensitive realty and the banking stocks are emerging as clear favourite. The housing demands remain robust in the metropolitan cities, while the land prices also stay firm.