Nifty snaps 7-day losing streak on potential monetary stimulus from central banks

Indian markets snapped its seven-day losing streak on March 3 tracking global markets after various central banks hinted policy initiatives to counter the economic slowdown in their respective countries.

The Reserve Bank of India (RBI) said it is “monitoring global and domestic developments closely and continuously.” Soothing concerns, it promised to take appropriate action to ensure that financial markets run smoothly.

“The spillover to financial markets in India has largely been contained. Growing hopes of coordinated policy action to mitigate a broader fallout to economic activity has boosted market sentiment today,” the banking regulator said in a statement.

Japanese Prime Minister Shinzo Abe on Tuesday said his government was ready to deploy further fiscal stimulus measures if needed to protect the country’s already fragile economy from the negative effects of the coronavirus, Reuters reported.

G7 central bank governors and finance ministers will hold a conference call later today to discuss measures to deal with the outbreak, although a source at the group said it would not detail any immediate fiscal or monetary steps to boost growth, it said.

Back home, tracking strong global cues, the S&P BSE Sensex rallied nearly 500 points, while the Nifty50 rose more than 100 points to reclaim 11,300 levels.

Let’s look at the final tally on D-Street – the S&P BSE Sensex rose 479 points to 38,623 and the Nifty50 was up 170 points to close at 11,303.

Sectorally, the action was seen in metals, power, healthcare, oil & gas, and energy indices. Broader markets outperformed frontliners as the S&P BSE Midcap index was up 1.79 percent and the S&P BSE Smallcap index gained 1.25 percent.

On the primary market front — the Rs 10,335-crore public offer of SBI Cards and Payment Services, the country’s second-largest credit card issuer, has seen subscription of 80.2 percent on March 3, the second day of bidding.

Experts are of the view that volatility is likely to remain for some more time. Rising hopes of the stimulus package by government and rate cut by US Federal Reserve aided investor sentiments.

“Comments by central bank officials over possible policy initiatives to curtail economic impact held markets positive across the globe. Broad-based momentum was witnessed in Metals and Pharma while the strong dollar held IT stocks higher,” Vinod Nair, Head of Research at Geojit Financial Services told Moneycontrol.

“With nations across the globe taking precautions over the virus, the further long-term economic impact looks minimal,” he said.

Top Nifty gainers: Tata Steel, Sun Pharma, ZEE Entertainment, Vedanta

Top Nifty losers: ITC, Yes Bank, Bajaj Auto

Stocks & Sectors:

Sectorally, the S&P BSE Metal index rose 5.6 percent, followed by the S&P BSE Power index which was up 3.99 percent, and the S&P BSE Healthcare index rose 3.77 percent.

Volume spike of 100-300% was seen in stocks like MGL, OIL, Equitas Holding, and Divis Laboratories.

Long Buildup was seen in stocks like Jubilant FoodWorks, PVR, HDFC Life, NTPC, and Torrent Pharma.

Short Buildup was seen in stocks like Equitas Holding, and Bata India

Stocks in News

Vodafone Idea: Shares of Vodafone Idea jumped over 5 percent after the company paid Rs 3,043 crore to the government towards deferred spectrum dues.

Pfizer: Shares of Pfizer gained 4 percent after reports emerged that its parent company in the US identified certain antiviral compounds it had in development that have the potential to inhibit coronaviruses.

L&T: Share price of Larsen & Toubro (L&T) gained on March 3 as the construction and engineering company’s power transmission and distribution business bagged orders in India and overseas.

Eicher Motors: Share price of Eicher Motors jumped 5 percent after the motorcycle and commercial vehicles manufacturer’s Royal Enfield sales rose 1 percent to 63,536 units in February 2020 against 62,630 units in the same month last year.

Reliance Capital: Reliance Capital share price fell 4 percent to hit an all-time low of Rs 6.18 on BSE. A day earlier, the company told the BSE that it defaulted on the interest payment of Rs 5.47 crore on a term loan on January 31, 2020 due to HDFC (Rs 4.76 crore) and Axis Bank (Rs 0.71 crore).

Technical View:

Nifty formed a bullish candle on the daily charts.

However, the litmus test for bulls lies in absorbing the supply pressure emanating from the bearish gap present in the zone of 11,384 – 11,536 levels registered on the last trading day of February.

If Nifty manages to sustain above 11,536 levels on a closing basis, it can eventually move higher towards 11,900 levels, suggest experts.

On the downsides, while strong support exists in the zone of 11,100 – 11,036 levels, a close below 11,130 shall be read as an initial sign of weakness.

“For time being traders with high-risk appetite are advised to buy into Nifty on any weakness towards 11,250 levels and look for an initial target of 11,500 with a stop below 11,130 on a closing basis,” Mazhar Mohammad, Chief Strategist – Technical Research & Trading Advisory, Chartviewindia.in told Moneycontrol.

Three levels to watch on Wednesday would be 11,152, 11,433, 11536.

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