Sensex, Nifty snap two-day losing streak; PSBs shine

Hopes of fresh stimuli by the government gave a fillip to investor sentiment as Sensex and Nifty broke the losing run of the last two consecutive sessions, ending with healthy gains on August 30.

Gains in shares of bank, finance, FMCG and IT heavyweights underpinned the gain of equity barometer Sensex which endured bouts of selling after opening higher.

“Firm global cues and expectation of some favourable announcements triggered a strong recovery in the latter half and helped the index to end in green,” said Ajit Mishra Vice President, Research, Religare Broking.

Rupee’s rise against the US dollar, a downtick in crude oil prices and positive global sentiment, Asia, as the US and China resumed trade negotiation, hemmed in to keep the market in positive terrain.

The rupee closed the day with a gain of 37 paise against the US dollar at 71.40.

With a gain of 264 points, or 0.71 percent, Sensex closed at 37,332.79, with 22 stocks in the green. The Nifty50 settled 75 points, or 0.68 percent, up at 11,023.25, with 36 stocks up and 14 stocks down.

Yes Bank, Sun Pharma, IndusInd Bank, Tata Steel and Hindustan Unilever were the top gainers in the Sensex index.

On the other hand, Power Grid, ONGC, HCL Technologies, Kotak Mahindra Bank and Larsen & Toubro were the top losers.

Midcaps and smallcaps outperformed Sensex as their sectoral indices on BSE closed 1.01 percent and 0.84 percent up, respectively.

Among the sectoral indices on BSE, only power, capital goods, utilities and oil & gas suffered losses of up to 0.59 percent. FMCG, basic materials, healthcare, metal and realty indices closed over 1 percent higher.

The breadth of the market favoured the gainers as 1,413 stocks clocked gains on BSE against 1,114 that incurred losses. As many as 170 stocks remained unchanged.

The rally in equities shot up the cumulative market capitalisation of BSE listed firms to Rs 1,40,98,451.66 crore from Rs 1,39,83,324.95 crore on August 29, making investors richer by Rs 1.15 lakh crore.

On a weekly basis, Sensex climbed 1.72 percent whereas Nifty logged a gain of 1.79 percent.

Top news of the day:

Finance Minister Nirmala Sitharaman announced mega merger of public sector banks.

PNB, Oriental Bank of Commerce and United Bank to merge to form the second largest PSB with a business of Rs 17.94 lakh crore.

Canara Bank and Syndicate Bank to be merged, which will be the fourth largest PSB, with a business of 15.20 lakh crore.

Union Bank of India, Andhra Bank and Corporation Bank to merge to become the 5th largest PSB with the business of Rs 14.59 lakh crore.

Indian Bank, Allahabad Bank will merge to form the 7th largest PSB with a business of Rs 8.08 lakh crore.

India’s June quarter GDP growth seen slowing, more stimulus expected.

April-July fiscal deficit stood at 77.8 percent of Rs 7.04 lakh crore FY20 target; fiscal gap for the same period came at Rs 5.47 lakh crore against Rs 5.40 lakh crore year-on-year.

Stocks in news:

Shares of PSU banks gained 1-13 percent ahead of the government’s announcement of their mega-merger. Jammu & Kashmir Bank climbed 12.75 percent to Rs 41.55 on BSE. Oriental Bank of Commerce (up 8.25 percent), Syndicate Bank (up 6.94 percent), Indian Bank (up 4.63 percent), Central Bank of India (up 3.95 percent) and IDBI Bank (up 2.29 percent) logged decent gains.

Shares of Wipro closed 2.15 percent higher at Rs 254.35 after the company expanded its strategic partnership with Google Cloud. The company expanded its strategic partnership with Google Cloud to accelerate cloud adoption and digital transformation for global enterprises.

After four sessions of gains, shares of rating agency ICRA fell 3.30 percent to Rs 2,707.55, a day after the company announced the immediate termination of its Managing Director and Group CEO Naresh Takkar.

Shares of Premier Explosives finished 1.16 percent higher at Rs 165.15 after the company received license from the chief controller of explosives.

Shares of Hindalco Industries climbed 2.61 percent to end at Rs 184.50, buoyed by reports that the company-owned Novelis was set to secure European Union (EU) antitrust approval for its $ 2.6-billion bid for Aleris.

Shares of Yes Bank closed with a gain of 3.75 percent at Rs 59.50 ahead of the bank’s board meeting where it is likely to discuss fundraising.

Shares of Adani Green Energy added 6.57 percent to its previous close to end the day at Rs 46.20 after the company said it is going to acquire 205 MW operating solar assets of Essel Green Energy.

Global markets:

European stocks continued to trade near one-month highs, helped by a surge in German real estate companies and on relief that trade tensions between the United States and China were easing, Reuters reported.

Asian markets ended on a higher note amid lowering trade tension between US and China. Nikkei added 1.19 percent to settle at 20,704.37 and Kospi closed with a gain of 1.78 percent at 1,967.79.

Technical view:

Nifty closed above the psychologically important level of 11,000 and formed a Hammer kind of pattern on the daily chart. It snapped two-week’s losing streak and gained 1.8 percent to form a Spinning Top pattern on the weekly scale.

Experts feel the index needs a strong follow-up buying which could take the index to 11,200 levels in coming sessions, otherwise the rangebound movement is likely to continue.

“Now index has support near 10,950-10,880 zone. Holding above these levels, we may see index to march towards 11,200 zone. Resistance for the index is coming near 11,060-11,130 zone.,” said Rohit Singre, Senior Technical Analyst, LKP Securities.Get access to India’s fastest growing financial subscriptions service Pro for as little as Rs 599 for first year. Use the code “GETPRO”. Pro offers you all the information you need for wealth creation including actionable investment ideas, independent research and insights & analysis For more information, check out the website or mobile app.