Strong hands raise stock market; early signs of pre-Budget rally

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By S Jha

New Delhi, January 18: In two days, Nifty erased losses of five days to close at 18165, while retracing from the immediate resistance of 18180. On second day on the trot, HDFC twins held the stock market steady to give a firm direction, even while profit booking kicked in the IT stocks at the higher levels.

Nifty by closing over 18150 has brought relief to the traders and investors. Bank Nifty too remained firm in the Wednesday session. The stock market will head to the weekly expiry on Thursday with bulls showing confidence on the Dalal Street as the Union Budget comes closer. The Union Budget will be presented on February 1, and the government is stated to have the fiscal cushion to do a few of the experimentations in the last full budgetary exercise before the Narendra Modi government seeks fresh mandate in the next year’s Lok Sabha elections.

Whenever the HDFC bank and HDFC move in tandem, the indices go trending has been seen on several occasions. This was the case once more on Wednesday. Both the scrips are index heavyweight, and even one percentage movement in them give a clear direction to the markets. In contrast, HDFC Life was weaker, as had been the case on Tuesday also, suggesting that the investors are betting on HDFC and HDFC Bank for the post-merger gains.

The metal index shined in the Wednesday session, with Hindalco again leading the show. It has also been seen that Hindalco is giving direction to the metal index, while Tata Steel is showing signs of breaking out of the short trading range seen for several weeks. Hindalco closed above Rs 500 level after several months. On March 28 last year, Hindalco had touched the level of Rs 630, which remains the year peak for the scrip.

Larsen and Toubro continued in momentum again on Wednesday, as the construction behemoth is giving signs of having broken out after several months of consolidation. The scrip has scaled its 52-week high, and seems to be in a clear momentum.

ICICI Lombard and Delta Corp were punished for poor quarterly numbers, as both lost four per cent each. In contrast, SBI Life among the insurance companies continues to be strong on the bourses. Advance and decline ratio is also favouring the bulls in the stock market.

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