The broader markets also participated in the run with Nifty Midcap index rising 1.3 percent and Smallcap up 1.7 percent.
The market continued its rally for second consecutive session on May 28 with the Sensex reclaiming 32,000 mark and the Nifty climbing to two-week high.
The benchmark indices had gained more than 3 percent in previous session and today the Nifty50 was up 143.85 points or 1.54 percent at 9,458.80 while the BSE Sensex rose 508.23 points or 1.61 percent to 32,113.45.
"The markets opened above the crucial 9,350 level and we need to hope it stays above those levels for a couple of trading sessions. If it is successful in doing that, the Nifty50 should attempt 9,700 levels in the June series itself. The support range of the market has now been upgraded to 9,000 - 9,050 levels," Manish Hathiramani, Proprietary Index Trader and Technical Analyst at Deen Dayal Investments told Moneycontrol.
The broader markets also participated in the run with Nifty Midcap index rising 1.3 percent and Smallcap up 1.7 percent.
Here are 5 factors that boosted sentiment:
Hope of Further Opening Up Economy
Reports suggested that the lockdown is likely to be extended by another two weeks to control the spread of coronavirus but the good thing is that there could be more relaxation which raised hope for less impact on economy and earnings going forward.
The lockdown measures are expected to be eased further in green and orange zones, while the entire focus of lockdown could be on major virus affected cities like Mumbai, Pune, Delhi, Chennai, Ahmedabad, Kolkata etc.
Positive Global Mood Despite US-China Trade Tensions
Dow Jones Industrial Average gained more than 2 percent overnight amid hope of further relaxation in lockdown measures in the United States, which could support sectors which badly hit by the temporary shutdowns.
Among Asian peers, Japan's Nikkei gained 2 percent and Australia's ASX 200 rose 1.4 percent despite US-China trade tensions. However, Hong Kong fell 1.6 percent and China's Shanghai was down 0.3 percent due to rising tensions between world's largest economies US and China.
Futures trade indicated that European markets are also expected to open higher despite US-China tensions mount, as regions are gradually opening for daily transactions.
Hope of Stimulus
After taking care of supply side measures in the nearly Rs 21 lakh crore financial package, reports indicated that once the lockdown eases to major extent, the government is open for another package which could be more focussed on demand revival that hit for more than couple of months.
Reports further said that this package could be given on case to case basis i.e. looking at the lockdown impact on particular sector.
Rally in Banking & Financials
Banking & financials have been leaders among sectors for second consecutive session amid hope that there could be less NPA pressure. Value buying and short covering could also be other reasons for upside in these stocks.
Nifty Bank index had gained more than 7 percent in previous session, while today it rose around 4 percent to climb above 19,000 mark.
The hope of stimulus also lifted sentiment in Auto (up over 2 percent), Realty (up 1.8 percent), Metal (up over 2 percent), and Media (up 2.6 percent) at the time of publishing this copy.
The upside in metals was also because of opening Chinese economy which is the biggest consumer and supplier of base metals.
Technical View
The Nifty50 gained more than 1.5 percent and formed bullish candle for second consecutive session so far.
If the index holds 9,400 levels in coming sessions then there could be further march towards highs seen in April.
"Momentum oscillator RSI is also placed positively on daily chart and thus, we may see continuation in upmove in coming days too. Going forward, the resistance for Nifty is placed at 9,500 - 9,600 levels, while previous hurdle of 9,180 would now act as immediate support for the index and below that, major support is placed at 9,000 zone," Chandan Taparia, Vice President | Analyst-Derivatives at Motilal Oswal Financial Services said.
Sameet Chavan, Chief Analyst-Technical and Derivatives at Angel Broking advised traders to trade with a positive bias and look for stock specific opportunities with good volumes as such pockets have potential to give decent returns.
