Sensex, Nifty extend gains; investors richer by Rs 4.8 lakh cr in 3 days

Indian equities continued their upward march for the third consecutive day on August 27, underpinned by sustained buying in most sectors.

Investor sentiment got a fillip as expectations of additional stimulus grew stronger after the Reserve Bank of India decided to pay a huge dividend to the government while the positive momentum built after the Finance Minister’s announcements on August 23 persisted.

“The recent announcement made by the Finance Minister and the outcome of RBI board meet are definitely positive for the Indian market. This is likely to lift domestic sentiments in the near-term,” said Ajit Mishra VP – Research at Religare Broking.

Major global brokerages said that RBI’s decision to transfer the surplus of Rs 1.76 lakh crore to the government after accepting the recommendations of Bimal Jalan committee is a positive and will help the Centre meet its fiscal deficit target.

Improved global sentiment amid signs of easing US-China trade war and rupee’s fresh rise against the US dollar also influenced the mood.

The rupee appreciated by 54 paise to close at 71.48 against the US dollar amid the revival of US-China trade talk hopes and gains in the domestic equity market.

The 30-share Sensex closed the day 147 points, or 0.39 percent, higher at 37,641.27, with 22 stocks in the green.

Nifty settled 48 points, or 0.43 percent, up at 11,105.35 with 35 stocks in the green and 15 in the red.

Mid and smallcaps outperformed the benchmark Sensex as the BSE Midcap ended 0.53 percent up while the BSE Smallcap jumped 1.63 percent.

The overall market capitalisation of BSE-listed firms jumped to Rs 1,41,46,021.22 crore on August 27 from Rs 1,40,34,462.19 crore on August 26, making investors richer by Rs 1.12 lakh crore in a day. In the last three sessions of gains, investors have become richer by Rs 4.8 lakh crore.

Tata Motors (up 8.87 percent), Tata Steel (up 3.86 percent), NTPC (up 2.75 percent), IndusInd Bank (up 2.72 percent), Vedanta (up 2.07 percent) and Mahindra & Mahindra (up 2.07 percent) emerged as the top gainers in the Sensex kitty.

On the flip side, Bharti Airtel (down 3.58 percent), Infosys (down 2.23 percent), Tech Mahindra (down 2.12 percent), Tata Consultancy Services (down 1.67 percent), Kotak Mahindra Bank (down 0.73 percent), Sun Pharma (down 0.63 percent), Hindustan Unilever (down 0.52 percent) and Axis Bank (down 0.16 percent) finished as the losers in the Sensex index.

BSE Telecom pack lost 2.26 percent to end the day as the top loser among sectoral indices. It was followed by BSE Teck and IT which lost 1.66 percent and 1.52 percent, respectively. Rest all ended in green, with metal, oil & gas, auto and industrials climbing up to 2 percent.

The breadth of the market favoured gainers as 1,669 stocks logged gains on BSE against 864 that suffered losses. As many as 156 stocks remained unchanged.

Top news of the day:

-The Supreme Court has extended ex-FM P Chidambaram’s interim protection from ED arrest. The hearing will continue tomorrow.

-Delhi’s Feroz Shah Kotla to be renamed Arun Jaitley Stadium.

-Moody’s sees significant uncertainty in India’s growth prospects.

-ATMs might soon place 6-12 hour gap between cash withdrawals, reported the Times of India.

-Salaries may rise as Centre proposes cut in employees’ PF contribution, the Business Standard reported.

Stocks in news

Shares of Bank of Baroda climbed 2.31 percent to Rs 97.25 on BSE, a day after the public lender said its capital raising committee approved raising up to Rs 2,150 crore in Tier-I, II bonds.

Rising for the third consecutive session, shares of Dewan Housing Finance Corporation (DHFL) closed 6.13 percent up at Rs 48.45. In the three sessions of gains, the stock has jumped 22 percent. In a BSE filing on August 26, the company said it has appointed KK Mankeshwar as its new statutory auditor.

Shares of Bharat Heavy Electricals (BHEL) rallied 5.41 percent after it won orders worth Rs 2,500 crore. “Valued at around Rs 2,500 crore, the orders have been placed on BHEL by NTPC,” the company said.

Shares of Infosys slipped 2.23 percent to close at Rs 785 on BSE. The IT major on August 26 said a board committee has approved the closure of the Rs 8,260 crore buyback offer with the company utilising almost full size of the issue approved.

Shares of Tata Motors rallied 8.87 percent to close at Rs 120.30 after a media report indicated that China may be considering to remove or relax restrictions on auto purchases.

Global markets

European markets eased off their lows as Italian stocks rallied on hopes that a snap election could be avoided by an arrangement to form a new government in Rome, Reuters reported.

Stocks in Asia ended higher on as investors watched closely for developments on the US-China trade war following a recent escalation. Shanghai composite added 1.35 percent to close at 2,902.19 and the Shenzhen component gained 1.86 percent to 9,443.18. Hang Seng index slipped about 0.3 percent.

Nikkei gained 0.96 percent to close at 20,456.08 while the Topix rose 0.79 percent to end its trading day at 1,489.69. Kospi closed 0.43 percent higher at 1,924.60 and Australia’s S&P/ASX 200 edged up 0.48 percent to finish its trading day at 6,471.20.

Technical view

Nifty formed a Doji pattern on the daily chart. “This reflects indecision in the minds of the market participants. On the higher side, the swing high of 11,181 and the junction of the 40-DEMA and the daily upper Bollinger Band i.e. 11,200 will be the key hurdle zone to watch out for,” said Gaurav Ratnaparkhi, Senior Technical Analyst at Sharekhan by BNP Paribas.

The analyst said that failure to surpass these barriers would set the Nifty back on the southward track. The hourly chart shows that the index is forming distribution near an upper channel line whereas the lower channel line will act as support near 11,000-mark.Subscribe to Moneycontrol Pro and gain access to curated market data, trading recommendations, stock analysis, investment ideas and insights from market gurus. Now, get Moneycontrol PRO for 1 year at Rs 289. Use code FREEDOM.