Market Movers: IT on a roll, RIL misses the party; 39 stocks turn ‘overbought’

MUMBAI: IT stocks were the highlight of Thursday’s trade as they cheered an upbeat start to the September quarter earnings season, and drove benchmark indices higher for the sixth straight session in which Nifty indicated the formation of Doji type pattern at the swing high of 11,905.

Usually, formation of the Doji pattern after a reasonable up move could be considered a reversal pattern post confirmation, analysts said, adding that any weakness in the next session is expected to trigger profit booking in the market from the highs.

The market was on a roll, with Sensex crossing the psychologically-important 40,000-mark for the first time since August 31, as it closed 304 points higher at 40,183 points, while peer Nifty rose 96 points to 11,835 points.

Among the top IT companies, Tata Consultancy Services (TCS) and Infosys logged new all-time highs, while peers Wipro and HCL Technologies scaled 52-week highs.

On the flipside, Reliance Industries (RIL) didn’t participate in the market rally, hurt by Amazon’s notice to Future Group over the deal with Reliance Retail.

Here is a lowdown on what happened in Thursday’s trade:

IT companies on a high
BSE IT index, which hit a record high, was the top sectoral gainer as it advanced nearly 3 per cent. Market participants cheered sector leader TCS’ upbeat September quarter performance, and the buyback announcement. The IT giant reported better-than-expected sales and a strong order book and looked prepared to capture pent-up demand. It also pleased investors with a Rs 16,000 crore in share buyback, in addition to a Rs 12 per share dividend. Meanwhile, Wipro and Majesco also announced share buyback plans.

Top software exporters TCS and Infosys scaled new all-time highs of Rs 2,885 and Rs 1,123.95, respectively, while HCL Technologies and Wipro hit 52-week highs of Rs 878.80 and Rs 367.75, respectively. These stocks gained 3.19 per cent, 2.57 per cent, 2.63 per cent and 7.22 per cent, respectively.

RIL, Future Group companies drop
Even as the broader market was upbeat, the most-valued company RIL saw its shares dipping 0.85 per cent to Rs 2,237.95, along with Future Group companies, after global retail giant Amazon sent a legal notice to promoters of Future Group for allegedly breaching of non-compete like contract over the latter’s deal with RIL.

Future Retail dropped 5.55 per cent to Rs 83.40, while Future Lifestyle Fashions tumbled 6.32 per cent to Rs 84.55, Future Enterprises declined 4.94 per cent to Rs 11.16.

Jet Airways looks up after a deep slumber
Jet Airways hit the upper circuit as it rose 4.89 per cent to Rs 30.05 after reports that London-based asset management company Kalrock Capital and UAE investor Murari Lal Jalan have been chosen as the new owners of the bankrupt airline.

Promoter action: Max Financial Services, Solara Active Pharma
Promoter Max Ventures Investment Holdings revoked the pledge on 1,08,000 shares of Max Financial Services between October 5-7. The stock dipped 0.68 per cent to Rs 605.35.

Promoter group Pronomz Ventures LLP invoked the pledge on 8,45,000 shares of Solala Active Pharma Sciences on October 5. The stock closed 2.89 per cent higher at Rs 1,200.

Stocks at 52-week high
A total of 145 stocks scaled 52-week highs on the BSE. These included TCS, Infosys, HCL Technologies, Wipro, Aarti Drugs, Apollo Hospitals, Coforge, Infibeam Avenues, Hero MotoCorp, and Laurus Labs, among others.

Stocks that hit upper circuit
Amid high momentum, as many as 251 stocks rose by their daily limit on the BSE. These included Jet Airways, Kilpest India, Alok Industries, and Aurionpro Solutions, among others.

Stocks that turned ‘overbought’
On the back of relentless buying, as many as 39 stocks turned ‘overbought’ as they crossed above the 70-mark on the RSI indicator. These included Wipro, HDFC Bank, HCL Technologies, Tech Mahindra, Solara Active Pharma, UltraTech Cement, Berger Paints and Apollo Hospitals, among others.

Where is Nifty headed?
According to Nagaraj Shetti, Technical Research Analyst, HDFC Securities, while the short-term trend of Nifty continues to be positive, the formation of Doji pattern, development of negative divergence and deteriorating market breadth at highs are all indicating the possibility of profit booking from the highs.

“A confirmation by the way of reasonable weakness is likely to change the trend. The next overhead resistance to be watched at 12,000 levels and immediate support is placed at 11,740,” said Shetti.