Taking Stock: Market recoups Budget Day losses! Investors’ wealth rises nearly Rs 3 lakh cr

Indian markets recouped Budget Day losses on February 4. After falling more than 2 percent on Budget, benchmark indices are now back at  pre-Budget levels.

The Nifty50 closed at 11,979 which is higher than the pre-budget level of 11,962 recorded on 31 January.

The S&P BSE Sensex rallied over 900 points while the Nifty50 rose nearly 300 points on Tuesday, supported by short-covering as crude oil price hit a 13-month low, liquidity measures from China to counter a slowdown in the economy, stable December quarter results, and relatively better January month auto sales.

Let’s look at the final tally on D-Street – the S&P BSE Sensex rose 917 points to 40789 while the Nifty50 closed with gains of 271 points at 11,979.

The total market capitalisation of BSE-listed firms rose Rs 2.79 lakh crore to Rs 156.54 lakh crore against Rs 153.75 lakh crore recorded on February 3.

Sectorally, the action was seen in consumer durables, metal, Oil & Gas, energy, and realty stocks. Broader markets underperformed as the S&P BSE Midcap index rose 1.37 percent while the S&P BSE Smallcap index rallied 1.29 percent.

“Indian bourses tanked on Saturday after the Budget failed to meet the Street’s expectations. The Budget failed to provide any short-term relief, due to which the market experienced massive carnage,” Umesh Mehta, Head of Research, Samco Securities told Moneycontrol.

“This was a knee jerk reaction but as investors realized that the budget will aid in the long-term growth of the economy, the market picked up. With the Budget overhang gone, investors are breathing a sigh of relief and are back to making fresh calls,” he said.

Mehta further added that additionally, January auto sales numbers were comparatively decent and with no other negative news, the Indian bourses saw a sudden rally on Tuesday.

Top Nifty gainers – Bharti Infratel, Bajaj Finserv, IOC, and Titan Company

Top Nifty losers – Yes Bank, Bajaj Auto, and ZEE Entertainment

Stocks & Sectors:

Sectorally, the S&P BSE Consumer Durables index rose 3.5 percent, followed by the S&P BSE Metal Index (3.2 percent), and the S&P BSE Oil & Gas index (3.07 percent).

Volume spike of 100-400 percent was seen in stocks like ZEE Entertainment, PNB, Aurobindo Pharma, Shriram Transport, and Manappuram Finance.

Long Buildup – Balkrishna Industries, JustDial, Chola Finance, MRF

Short Buildup – Manappuram Finance, Biocon, SRF, Exide Industries

Nearly 100 stocks hit a 52-week high on the BSE that include names like MRF, Honeywell Auto, Shree Cements, Bajaj Finance, Dr Reddy’s Laboratories, Info Edge, HUL, PVR, and Asian Paints.

Stocks in news:

Titan Company: The share price of Titan Company spiked over 7 percent after the company reported a 12.9 percent year-on-year growth in Q3FY20 profit driven by better-than-expected operating numbers and lower tax cost.

Bajaj Electricals: Bajaj Electricals share price almost added 9 percent despite the company reporting a weak set of numbers for the quarter ended December 2019.

Piramal Enterprises: Piramal Enterprises share price gained over 5 percent after the company posted a robust set of numbers for the quarter ended December 2019.

GSK Pharma: Share price of GSK Pharma tanked 12 percent hitting a 3-month low of Rs 1,429.25 after the pharma major reported a consolidated net loss of Rs 661.16 crore for the December 2019 quarter, mainly on account of the impact on the recall of Zinetac.

Shriram Transport: Shriram Transport Finance Corporation share price gained over 7 percent after the company reported better numbers in the quarter ended December 2019.

Technical View:

Nifty50 made a Long White Day candle and is just 21 points away from 12,000.

There seems to be resistance around its 9-Day Simple Moving Average (11,987) as pullback attempts on a corrective swing from the highs of 12,430 – 11,614 perished after testing the said average.

The rally could extend towards 12,087-12,117

Considering the last two days of strength, traders can look buy the dips whereas shorting shall be completely avoided, suggest experts