Following a six per cent gain last week, BSE Sensex and Nifty 50 continued to march North on Monday, as investor sentiment was lifted by re-opening of the economy in a graded manner led by buying in PSU Bank stocks. During the day, Sensex hit the day’s high of 33,673.83, while Nifty 50 surpassed the 9,900-mark. Both the indices ended with major gains with Sensex at 33,303 and Nifty 50 at 9,826. Reliance Industries, HDFC Bank, HDFC, TCS and Bajaj Finance were among the top index contributors. Bajaj Finance was the top Sensex gainer, up 10.62 per cent. While Sun Pharma was the top laggard, down 2.17 per cent. All the 11 sectoral indices finished the trade with upticks. Nifty PUS Bank index soared 7.57 per cent led by gains in Canara Bank, Bank of India, Bank of Baroda and Punjab National Bank.
What led to the rally in Sensex, Nifty today-
Unlock 1.0 and monsoon sent bears on back foot: Unlock 1.0 with significant relaxations and the announcement of the metrological department of normal monsoon added to buying interest across the board. “After the recent fall, the valuations also have become attractive and the negatives seem to have been discounted, countries across the world have come out with stimulus and there are expectations that more such stimulus would be announced if required,” Rajesh Agarwal, Head of Research, AUM Capital Market, told Financial Express Online. “In the short term though it seems that too much has been achieved in a very short span of time, this might lead to some profit booking or consolidation,” Rajesh Agarwal added.
Bulls took over the bears on stimulus hopes, monsoon and short-covering: Markets extended last week’s gains. “Expectations of further stimulus from the US, China, Europe, and Japan, and unlocking of economy, the timely arrival of monsoon, and short covering are the key reasons behind today’s rally in the market,” Amit Gupta, Cofounder Tradingbells, told Financial Express Online. “Technically, Nifty has critical resistance at 10,000-mark if it manages to trade above this level then we can expect this rally to get momentum towards 10350/10600 levels,” Amit Gupta added.
Broad-based buying in large, midcaps: Cues from the positive Asian markets and the announcement of the gradual opening of the economy lifted the investor sentiment. “The markets rallied in the afternoon session with broad-based buying seen in both large and mid-cap stocks tracked by respective indices,” said Narendra Solanki, Head Fundamental Research, Anand Rathi Shares and Stock Brokers. The sentiment further improved during the day as Commerce Minister said that most startups will be eligible for additional liquidity and funding under the credit and funding support announced for MSMEs under the Aatmanirbhar Bharat Abhiyan package.
Markets cheered lockdown extension: Nifty opened on a strong note today and surpassed the 9,900-mark in the intraday trade. “However, profit booking around 9930 levels led it to close around 9810 levels. On the daily chart, Index has formed a bullish gap area in the range of 9706-9599 levels which will now act as an immediate short term support zone. We expect Nifty would exhibit positive bias and Nifty may scale towards 9950-10200 levels,” Rajesh Palviya, Head Technical & Derivatives, Axis Securities, told Financial Express Online. He further expects bullishness in banking, financial and pharma sector in coming weeks.