Taking Stock: Financials lead the rally on Street; Sensex back above 35,000

Indian markets snapped two-day losing streak as D-Street picked up momentum in the second half of the trading session which took the S&P BSE Sensex beyond 35,000 while Nifty50 reclaimed 10,400 levels to close at a 1-week high.

Let’s look at the final tally on D-Street – the S&P BSE Sensex rose 498 points to 35,414 while the Nifty50 climbed 127 points to close at 10,430.

Positive global cues, higher GST collections, and strong macro data lifted sentiment. The gross GST revenue collected in the month of June stood at Rs 90,917 crore. The collection for the April-June quarter was at 59 percent of the revenue in the same period last year, the Finance Ministry said.

The Nikkei Manufacturing Purchasing Managers' Index, compiled by IHS Markit, increased to 47.2 last month from 30.8 in May it was still below the 50-mark separating growth from contraction

"Benchmark indices gained strength on the back of data showing that economic activity may be stabilizing. The gains were led by the banking index. The Nikkei PMI survey indicated that although activity contracted in June, it was at a much slower pace as compared to May month. This gives rise to the hope that the economy may be emerging out of one its worst periods in recent times," Vinod Nair, Head of Research at Geojit Financial Services told Moneycontrol.

"However, the continued rise in virus infections, and the resulting extension of lockdowns in many areas, may continue to slowdown and impact the economic recovery. Although the market trend is positive, the upside seems to be capped and investors are advised to follow a stock specific strategy," he said.

Sectorally, the rally was led by gains in financials, energy, public sector, FMCG, and metal stocks while profit taking was visible in capital goods, power, healthcare, realty, and consumer durables stocks.

On the broader markets front – the S&P BSE Midcap index rose 0.18 percent, and the S&P BSE Small-cap index was up 0.39 percent – underperforming the benchmark indices.

Top Nifty gainers include names like HDFC, UPL, Bajaj Finserv, and Axis Bank.

Top Nifty losers include names like Cipla, Nestle India, NTPC, and M&M.

Stocks & Sectors:

Sectorally, the action was seen in the S&P BSE Finance index which rose 2.7 percent, followed by the S&P BSE Bankex which was up 2.6 percent, and the S&P BSE Energy index was up 1.7 percent.

Selling pressure was visible in the S&P BSE Capital Goods index that fell 1.1 percent, S&P BSE Power index was down 1.18 percent, and the S&P BSE Healthcare index fell 0.58 percent.

Volume spike of more than 100% was seen in stocks like Chola Finance, Axis Bank, Muthoot Finance, and Century Textiles.

Long Buildup was seen in stocks like M&M Finance, Bank of Baroda, and Canara Bank.

Short Buildup was seen in stocks like Glenmark Pharma, JustDial, and L&T.

More than 100 stocks on the BSE hit a fresh 52-week high that include names like Navin Fluorine, Escorts, IOL Chemicals, and Gujarat Gas.

Stocks in news:

Glenmark Pharmaceuticals stock price shed over 3 percent after Glenmark Pharmaceuticals USA was charged for conspiring to fix prices for generic drugs, the US Justice Department said in a statement, a Reuters report said.

Gayatri Projects shares were down almost 5 percent after the company reported net loss to Rs 80.99 crore in the quarter ended March 2020 as against net profit of Rs 83.99 crore during the previous quarter ended March 2019.

Vodafone Idea stock price shed over 4 percent after the company reported consolidated loss at Rs 11,643.5 crore in the quarter ended March 2020 versus a loss of Rs 6,438.8 crore in December 2019.

Chambal Fertilizers & Chemicals stock price was up over 5 percent after CRISIL re-affirmed the rating of “CRISIL A1+” to the Commercial Paper programme of the company.

Suzlon Energy stock jumped 5 percent after the company completed debt restructuring with unanimous approval of secured lenders.

Maruti Suzuki ends near day’s low as June sales were below estimates

Hero MotoCorp fails to hold gains seen after June sales, stock 1% off highs

Except Kotak Bank, all Nifty bank constituents close in the green

Technical View:

Nifty formed a bullish candle on daily charts| It is back above 5-Days EMA

The index managed to hold previous day’s close of 10300 zones and witnessed sustained buying interest throughout the day towards 10450 levels.

The Nifty has been moving in a rising channel on daily scale which is positive

It has to continue to hold above 10333 zones to witness an up move towards recent swing high of 10555 then even higher zones while on the downside immediate support is seen at 10300 then 10250 levels.