Taking Stock: Market at 7-week high! Nifty back above 9,500

It was indeed a Wonderful Wednesday on D-Street as market hit seven-week high and closed in the green for the third consecutive day in a row. The S&P BSE Sensex rallied more than 600 points while the Nifty50 reclaimed 9,500 for the first time since March 12.

Let’s look at the final tally on D-Street: the S&P BSE Sensex rose 605 points to 32,720 while the Nifty50 closed 172 points higher at 9,553.

Sectorally, the action was seen in metals, finance, IT, telecom, capital goods, and Bankex while FMCG saw some profit taking.

Broader markets underperformed as the S&P BSE Midcap index was up 1 percent while the S&P BSE Smallcap index closed with gains of 1.04 percent.

Ease in lockdown measures lifted sentiment. If the momentum continues, the Nifty50 should be able to inch closer to 10,000. The rally was led by banking stocks.

Investors’ wealth rose by more than Rs 2 lakh crore. The average market capitalisation of the BSE-listed companies rose from Rs 124.13 lakh crore on April 28 to Rs 126.22 lakh crore the next day.

“The Nifty closed above the 9,500-mark and almost all sectoral indices traded positive except for the defensives, FMCG and pharma. Expectations of lockdown measures easing and company-specific news about restarting operations gave support to the markets,” Vinod Nair, Head of Research at Geojit Financial Services told Moneycontrol.

All eyes will be on the FOMC outcome due later in the day, say experts.

“Market continues to remain in a medium-term uptrend. The Nifty is expected to test 9,900-10,000 levels in the next few weeks. Broader participation is increasing, which is a positive sign and reinforces the positivity,” Sahaj Agrawal, Head of Research- Derivatives at Kotak Securities said.

“On the downside, trend support is seen only at 8,900. We expect the broader markets to remain positive over the next few weeks. Traders can consider buying on dips. Banking and metals expected to provide further momentum while Pharma and FMCG expected to witness profit booking,” said Agrawal.

Top Nifty gainers include HDFC Bank, GAIL India, Adani Ports, Hindalco Industries, and HDFC.

Top Nifty losers include Dr Reddy’s Laboratories, HUL, Asian Paints, and Axis Bank.

Stocks & Sectors

Sectorally, the S&P BSE Metal index rallied nearly 4 percent, followed by the S&P BSE Finance index which was up 3.1 percent, the IT index gained 2.3 percent, and the Telecom index closed with gains of 2.2 percent.

A volume spike was seen in stocks like Hindalco, TCS, NALCO, Apollo Tyres, and Naukri.

Long Buildup was seen in stocks like Bosch, Naukri, Eicher Motors and Coal India.

Short Buildup was seen in stocks like SRF, Lupin, Cipla and HPCL.

Stocks in news

Axis Bank: The share was down over 3 percent after the bank posted a net loss of Rs 1,387.78 crore for the January-March quarter 2020, largely impacted by a spike in provisions.

Zee Entertainment: The stock jumped over 4 percent after FPIs raised stake to 68.27 percent in Q4FY20.

Hester Biosciences: The share price surged 20 percent after the company collaborated with IIT-Guwahati for a COVID-19 vaccine.

Strides Pharma Science: The stock was up 20 percent after the company commenced export of Favipiravir Antiviral tablets.

Vodafone Idea: The share was up 5 percent after the Supreme Court allowed a tax refund of Rs 733 crore.

Motherson Sumi Systems: The share price jumped over 4 percent after the company said more than 80 of its 152 manufacturing facilities across the world were now operational.

Varroc Engineering: The share jumped 5 percent after ICRA reaffirmed long-term rating at ICRA AA- and revised the outlook from stable to rating watch with negative implications.

NLC India: The stock rose over 4 percent after the company commenced coal production at Talabira II and III mines.

Crompton Greaves Consumer Electricals: The share gained over a percent after the company partially resumed operations at Baddi (Unit III).

Tech Mahindra: The share price was up almost 2 percent after Nomura upgraded the stock to buy from neutral and reduced target price to Rs 640 from Rs 820.

Technical View

The Nifty50 made a strong bullish candle on the daily charts.

After seven days, the index appeared to have registered a decisive breakout.

From current levels, the projected target can be in the 9,900–9,970 zone. It can face some selling pressure around its 50-Day EMA, whose value is placed around 9,740.

Considering the long weekend and the new series ahead, short-term traders are advised to book profits in the next session as the Nifty heads to 9,700 .