Sensex, Nifty post biggest single day gains in 3 months

Markets across the globe witnessed relief rally on January 9 after the tensions between the United States and Iran eased, boosting investor sentiment significantly.

Indian equity benchmarks logged strong gains and investors lapped up equities across the board after crude oil prices softened, the rupee rose against the US dollar and media reports suggested that the government is gearing up for announcing bold measures in the upcoming Budget to prop up the economy.

“Diplomatic handling of the Iran-US situation by the US President calmed markets today. Back home, the keen interest shown by the Prime Minister in resolving the slowing economy cheered equity markets which witnessed buying in key pivots and select midcaps,” said S Ranganathan, Head of Research at LKP Securities.

Vinod Nair, Head of Research at Geojit Financial Services had a similar view on today’s session.

“Expectation for initiatives to bring growth in the upcoming Budget and easing tensions in West Asia seem to have cheered investors. The government is poised to bring initiatives and policy measures to support the economic growth to benefit equities for the long term. Meanwhile, the short-term market trend will be driven by events like Q3 results which are expected to show some improvement due to the low base,” Nair said.

The market barometer Sensex ended 635 points, or 1.55 percent, higher at 41,452.35, with 26 stocks in the green and four in the red. The Nifty50 closed 191 points, or 1.58 percent, up at 12,215.90, with 43 stocks up and seven down.

The rally was broad-based as the BSE Midcap (up 1.51 percent) and Smallcap (up 1.55 percent) indices rose in sync with the benchmarks.

Stocks & Sectors:

On the sectoral front, barring Nifty IT (down 0.18 percent), all indices ended with healthy gains.

Nifty Realty, with a gain of 2.73 percent, emerged as the top gainer among the sectors, followed by Nifty Auto and PSU Bank index which rose 2.68 percent and 2.41 percent, respectively. Nifty Bank, Media and Private Bank index jumped over 2 percent each.

A volume spike of 1,130 percent was seen in Max Financial Services. Besides, a volume spike of over 200 percent was witnessed in stocks such as Amara Raja Batteries, Castrol India and Voltas.

Top Nifty gainers – JSW Steel, Bharti Infratel, Tata Motors

Top Nifty losers – TCS, Coal India, HCL Tech

Long Buildup – Tata Motors, Tata Motors (DVR), JSW Steel, NCC, DLF

Short Buildup – Max Financial Services, Vodafone Idea, Mindtree

Stocks in the news:

Yes Bank share price jumped 2.7 percent on BSE, a day ahead of the private lender’s board meeting to discuss fundraising.

Shares of Reliance Industries rose 2.25 percent after Morgan Stanley said it expects strong growth in retail and telecom businesses. While having overweight rating on the stock with a target price at Rs 1,753 per share, Morgan Stanley said company’s Q3 earnings should be steady despite headwinds of oversupplied petrochem markets.

BGR Energy Systems share price jumped almost 14 percent after the company bagged an order worth Rs 224 crore.

Shares of the country’s second-largest software services provider Infosys climbed over 1 percent a day ahead of the company’s third quarter scorecard.

Shares of Bharti Airtel ended flat after the company launched its Qualified Institutional Placement (QIP) worth $ 2 billion.

The share price of IndusInd Bank gained 3 percent after the global research firm BofAML upgraded the stock to buy and raised target to Rs 2,000 from Rs 1,500 per share.

Technical View:

Nifty formed a bullish candle on the daily chart. After showing a promising upside bounce from the lows in the last session, Nifty witnessed a hefty gains today and closed higher and formed a long bull candle with a gap up opening and closed near the highs.

“The opening upside gap remains unfilled. Technically, this action indicates a strong comeback of bulls and this pattern seems to have nullified the negative status created by the panic selling of January 6,” said Nagaraj Shetti – Technical & Derivative Analyst at HDFC securities.

The short-term trend of Nifty is positive, there is a possibility of further upside in the next session. Nifty could encounter the upside resistance of 12,290-300 levels in the next 1-2 sessions, Shetti said.

Three levels: 12,132 | 12,224 | 12,293

Max Call OI: 12,500 | 12,300

Max Put OI: 12,000 | 12,200Get 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.