Stock Market: Nifty at summit; bears lurk to strike

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By S Jha

New Delhi, June 29: This may be a time when six of 10 blind-folded stocks may spurt with horsepower on the bourses. Indices are flying with animal spirit without supporting macro-economic data, while the Central banks world over are sounding more hawkish to stay on rate hike path for longer duration.

Nifty kissed the 19000 mark on Wednesday, the day of weekly and monthly expiry briefly, as the foreign funds pumped cash in the equity market, largely going into the Adani stocks as part of share purchase deal. Nifty also broke out of the 18600-850 range to finally fly into the 19,000 level on Wednesday.

Bank Nifty which had almost been without gain for one months also closed over 44300 level. In fact, Bank Nifty is trading with a loss of 108 points from the level one month ago. Nifty on the other hand is trading with gains of 338 points from the level seen one month ago. Thus, Nifty has decisively outperformed the Bank Nifty in the June series.

HDFC merger theme, likely to take place on July 1, gave the push to the Nifty in the last few sessions. HDFC bank sharply climbed to Rs 1670 level. HDFC and HDFC Life also rallied strongly. Much of the gains of Nifty could be explained because of the rally in Nifty.

Nifty Midcap and Nifty Smallcap indices have been the outperformers in the June months, gaining more than five per cent. The ferocious speed with which some of the scrips have rallied is beings seen by market participants as signs of caution.

Jupitor Wagons rallied 28 per cent in the last one month. Avantel rallied over 58 per cent in the last one month. Even laggards such as Cyient from IT index rallied over 15 per cent. Wheels India rallied over 39 per cent in the last one month. The Grob Tea also has gained over 30 per cent in the last one month. Dynamic Cable gained over 37 per cent in the last one month. Centum Electronic gained also over 31 per cent in the last one month. IPOs even while brokerages are warning of overvaluation are being oversubscribed at several multiples. IdeaForge IPO has been subscribed over 50 times, while retailers have placed bids for 64 times. Cyient DLM, another IPO, has been subscribed over eight times. The market participants are sounding cautionary notes that the indices may be over heated and the retailers may wait stay patient for better share price discovery to get better risk reward ratio.