Hopes of stimulus boost sentiment, investors earn Rs 4 L cr in a day

Hopes of another stimulus package from the government and expectations of coronavirus infections peaking out helped the benchmarks, Sensex and Nifty, end with strong gains on April 9, while firm global cues also underpinned the sentiment of the market.

As per media reports, the government may soon announce another fiscal package which should be almost similar to the Rs 1.75 lakh crore stimulus announced last month.

The new package may focus on interest rate subventions to medium-sized businesses, sops for the troubled realty sector and also state-run banks’ recapitalisation, Bank of America Securities said.

On the global front, European stock markets gained for a fourth straight day on Thursday on hopes the coronavirus pandemic was close to peaking, with investor attention also focused on a meeting of European Union finance ministers to discuss an economic rescue package, reported Reuters.

Sensex closed with a solid gain of 1,266 points, or 4.23 percent, at 31,159.62 while Nifty settled 363 points, or 4.15 percent higher at 9,111.90.

Mid-caps and small-caps, too, logged healthy gains but underperformed Sensex. The BSE Midcap and Smallcap indices closed 3.63 percent and 3.15 percent higher, respectively.

For the week, both Sensex and Nifty jumped by nearly 13 percent.

Experts are of the view this is a trading rally in a bear market which may not be sustainable.

“Indian markets were up in sync with global markets on the expectations of infections peaking out and for more stimulus measures to be announced. This uptrend seems to be a short-term bear market rally and may not be sustainable,” said Vinod Nair, Head of Research at Geojit Financial Services.

The overall market capitalisation of BSE-listed firms jumped to Rs 120.82 lakh crore on April 9 against Rs 116.82 lakh crore on April 8, making investors richer by Rs 4 lakh crore in a single day.

Sectorally, the action was seen in auto, bank, finance, metal, telecom and consumer discretionary goods & services.

Top Nifty gainers include names like Mahindra & Mahindra, Maruti Suzuki, Cipla, Titan and Tata Motors.

Top Nifty losers include names like Hindustan Unilever, Dr. Reddy’s Laboratories, Tech Mahindra and IndusInd Bank.

Stocks & Sectors:

All sectoral indices ended with healthy gains. The BSE Auto emerged as the top gainer among the sectoral indices, jumping 10.26 percent, followed by Consumer Discretionary Goods & Services which rose 6.04 percent.

BSE Finance, Bankex, Telecom and Metal indices logged gains of over 5 percent each.

Volume spike of over 100% was seen in stocks like Amara Raja Batteries, Balkrishna Industries, UBL, Lupin and Exide Industries.

Long Buildup was seen in stocks like Motherson Sumi, Mahindra & Mahindra, Cipla, Cholamandalam Investment and Finance Company and Maruti Suzuki.

Short Buildup was seen in stocks like Hindustan Unilever, Godrej Consumer Products, Tech Mahindra, Dr. Reddy’s Laboratories and IndusInd Bank.

As many as 514 stocks, including Raymond, Jubilant Life Sciences, Sobha, Adani Green Energy, Suzlon Energy, Indiabulls Integrated Services, Sadbhav Engineering and Dish TV, hit their upper circuit on BSE.

Some 37 stocks hit 52-week highs, with many pharma stocks, including Ajanta Pharma, Abbott India, Cadila, Alkem Laboratories, Cipla, Divi’s Laboratories, Dr. Reddy’s Laboratories and Torrent Pharmaceuticals, among them.

Stocks in news:

Mahindra and Mahindra: Mahindra and Mahindra share price surged 17 percent after CRISIL reaffirmed its rating. M&M in its BSE filing on April 9 said CRISIL has reaffirmed its long term rating at AAA/Stable and short term rating at A1+ for the company’s bank facilities.

Aurobindo Pharma: Aurobindo Pharma share price rallied almost 5 percent after the company received approval from the US health regulator for an antidepressant drug.

Manali Petro: Shares of Manali Petrochemicals jumped 10 percent after the company recommenced production of propylene oxide.

Hindalco Industries: Shares of Hindalco Industries climbed 6.49 percent after its subsidiary Novelis received the final regulatory clearance for the acquisition of Aleris.

Titan Company: Titan Company share price climbed 11.12 percent, a day after the company said its growth in Q4FY20 was mostly in line but the coronavirus outbreak had hurt sales.

Technical View:

Nifty formed a bullish candle on the daily charts and robust bullish candle on the weekly chart.

Shrikant Chouhan, Executive Vice President, Equity Technical Research at Kotak Securities thinks with Nifty closing above the level of 9,050 is positive for the market.

“It has formed the series of ‘higher top and higher bottom’ that would lift the index to 9,400 level. In the best-case scenario, Nifty could even hit the level of 9,600. Support for the index exists at 8,800 and 8,650 levels,” Chouhan said.

Manav Chopra, CMT, Head Research – Equity, Indiabulls Securities said: “Nifty rallied on expected lines and closed above the resistance zone of 9,050. Momentum is likely to continue and the level of 9,300-9,500 is likely to get achieved. Strong value-buying along with short covering was visible and now 8,800-9,000 is likely to act as near-term support zone on the downside.”

Disclaimer: The views and investment tips expressed by investment experts on Moneycontrol.com are their own and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.

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