Sensex climbs above Mount 39K; Nifty tops 11,600

Sensex reclaimed Mount 39K for the first time since July 5 while Nifty also managed to climb above its crucial resistance level of 11,600 on July 16.

Sensex closed 234 points higher at 39,131 while Nifty rose 74 points to end at 11,662. The broader market performed in line with benchmark indices – the S&P BSE midcap index rose 0.69 percent while the S&P BSE Smallcap index closed 0.27 percent higher.

Amongst the sectoral indices, except IT which ended with minor losses, all the other indices ended with gains wherein oil & gas, realty and capital goods were top gainers.

Sharp fall in the domestic 10-year yield to 6.34 percent, improvement in monsoon, as well as earnings, helped the sentiment while a rise in crude oil prices and ongoing geopolitical concerns between the US and Iran capped the upside.

“We expect the markets to remain choppy in the near term in the backdrop of weak domestic sentiments given the on-going economic slowdown. The monsoon has shown considerable improvement over the past 1-2 weeks which is positive for the Indian economy. However, the progress of monsoon would be actively tracked by traders and investors. Further, the earnings announcement by companies is likely to lead to stock-specific volatility,” Ajit Mishra Vice President, Research, Religare Broking Ltd, told Moneycontrol.

Top Nifty gainers include companies like Sun Pharma, Tata Motors, and YES Bank while Britannia Industries, M&M, and TCS were the laggards.

In terms of technical, Nifty formed a bullish candle as it closed above its 50-days Exponential Moving Average (EMA) placed at 11,615. This moving average acted as a tough resistance for the index for the past three sessions.

The index has to now hold above 11,600 levels for the rally to extend towards 11720 then 11750 levels while on the downside supports are seen at 11,550, feel experts.

Stocks in News

Yes Bank shares ended 11 percent higher on July 16 after a media report indicated that private equity firms showed interest for a major stake in the private sector lender, said a report.

Share price of auto major Tata Motors jumped over 5 percent on July 16 on reports Jaguar Land Rover Automotive Plc won a 500 million-pound loan guarantee from the UK government.

Shares of Tinplate Company of India and Tata Metaliks fell over 3 percent each after a weak set of June quarter earnings reported by both companies.

Mahindra and Mahindra shares fell 1.4 percent after global brokerage house CLSA downgraded its rating on the stock to ‘sell’ from ‘underperform’, citing weak earnings growth ahead.

Global update:

Stocks in Asia ended mixed on Tuesday. Shanghai composite slipped 0.16 percent to close at 2,937.62, while the Shenzhen component shed 0.28 percent to finish at 9,283.41. The Shenzhen composite closed just below the flatline at 1,571.81.

Hang Seng index advanced about 0.1 percent. Nikkei slipped 0.69 percent to end its trading day at 21,535.25. The Topix index shed 0.48 percent to close at 1,568.74.

Kospi ended its trading day 0.45 percent higher at 2,091.87. Australian benchmark S&P/ASX 200 slipped 0.18 percent to close at 6,641.00 while the MSCI Asia ex-Japan index added 0.2 percent.