RBI booster shot helps Nifty close above 9,250; Sensex rallies 1,000 pts

The Reserve Bank of India (RBI) governor Shaktikanta Das on April 17 announced a string of measures to ease liquidity and cushion some of the coronavirus pain, which helped the Sensex and the Nifty climb above crucial resistance levels towards the close of the session.

The Nifty closed above 9,250 levels while the S&P BSE Sensex rallied nearly 1,000 points.

Let’s look at the final tally on D-Street: the S&P BSE Sensex rose 986 points to 31,588 while the Nifty50 closed 273 points higher at 9,266.

The benchmark indices closed in the green for the second week in a row.

Banking and NBFC stocks remained in focus as they are likely to benefit the most from the measures announced by the central bank.

The RBI tried to address the concerns of the sectors that were not getting the complete benefit of the steps it had taken earlier.

“TLTRO to be used for 50% large and 50% smaller NBFCs will help the NBFC sector, which is under increasing stress of NPAs and liquidity. Standstill in asset classification and one-time restructuring for commercial real estate will support banking sector stability,” Mihir Vora, Director & Chief Investment Officer, Max Life Insurance, said.

“The governor also kept the option of more such measures if needed. We expect a continuation of such measures by the RBI and the government, given the gravity of the situation.”

Sectorally, action was seen in banks, NBFCs, auto, realty, energy as well as IT stocks.

Rate-sensitive stocks were in the focus after the RBI cut the reverse repo rate by 25 bps, which is expected to give banks the incentive to lend money rather than keep it with the RBI, experts say.

The Nifty Bank rose more than 1,200 points or 6.6 percent led by gains in Axis Bank, ICICI Bank, IDFC First Bank, Bandhan Bank and Federal Bank.

The broader markets underperformed, as the S&P BSE Midcap index was up 2.1 percent while the S&P BSE Smallcap index gains 2.4 percent.

Das said more measures could be taken if needed. Inflation was falling which had opened up space for a rate cut, the RBI said.

“The liquidity boosting measures announced by the RBI on the back of positive global cues boosted the markets today despite the profit-booking seen in afternoon trade,” S Ranganathan, Head of Research at LKP Securities, told Moneycontrol.

“Financials led the charge today and several heavyweights joined the party as the day progressed in anticipation of a stimulus package.”

Top Nifty gainers include Maruti Suzuki India, ICICI Bank, Eicher Motors and Axis Bank.

Top Nifty losers include Bharti Infratel, HUL, Nestle India, and Sun Pharma.

Stocks & Sectors

Sectorally, action was seen in the S&P BSE Bankex that was up nearly 7 percent, followed by the S&P BSE Finance index that gained 5.4 percent, and the S&P BSE Auto index was up 4.6 percent.

On the other hand, the S&P BSE FMCG index fell nearly 1 percent followed by the S&P BSE Healthcare index that was down 0.69 percent.

A volume spike of more than 100 percent was seen in stocks like Havells India, Bajaj Finserv, Ujjivan Financial Services, Eicher Motors and Bharat Forge.

Long buildup was seen in stocks like CESC, Shriram Transport, Jubilant FoodWorks, M&M and Tata Chemicals.

Short Buildup was seen in stocks like Torrent Pharma, Apollo Hospitals and Cadila Healthcare.

More than 500 stocks on the BSE hit the upper circuit. These include Orissa Minerals, Affle India, Shriram Transport, HEG, and AU Small Finance Bank.

Stocks in news

TCS: The share price rose over 5 percent after the IT services company on April 16 reported a consolidated profit of Rs 8,049 crore, down 0.85 percent on a quarter-on-quarter basis. Dollar revenue for the March quarter stood at $ 5,444 million, down 2.5 percent QoQ.

Oberoi Realty: The stock rallied more than 12 percent after the company repaid NCDs ahead of schedule. It has prepaid 125 listed non-convertible debentures of Rs 1,00,00,000 each, aggregating to Rs 125 crore, and interest payment.

Graphite India: The stocks was locked in 5 percent upper circuit after the company resumed partial operations at Satpur plant. The company on April 16 told the BSE that it had started partial manufacturing at its graphite electrode plant in Satpur, Nashik, Maharashtra.

JK Lakshmi Cement: The share price jumped 10 percent after its grinding units in Gujarat resumed operations partially.

L&T: Contracts from domestic clients lifted share price by over 2 percent after the buildings & factories business secured significant orders.

Mahindra & Mahindra: The company plans to raise Rs 1,000 crore via NCDs. The company has approved issuance and offer of 10,000 rated, listed, unsecured, redeemable, 6.65 percent non-convertible debentures of face value Rs 10,00,000 each at par, aggregating Rs 1,000 crores on private placement basis.

Sudarshan Chemical: The share price was up 3 percent after the company restarted its facility at Roha in Maharashtra.

Cadila Healthcare: The stock declined 3 percent even though Zydus Cadila received final approval from the USFDA to market Erlotinib tablets.

RITES: Share price jumped 4 percent after the company said it did not expect COVID-19 to have a major impact on FY20 top line.

Technical View

The Nifty formed a strong bullish candle on the daily charts, which resembled a ‘Hanging Man’ pattern.

This kind of formation occurs around short-term turning points and hence, suggests some sort of exhaustion in the ongoing upmove.

Confirmation of weakness on a price chart will occur if the Nifty slips below 9,091 in next trading session, then the initial target will be in the 8,885–8,820 zone. A bigger correction should be expected on a close below 8,820.

If the upmove extends beyond 9,324, then the index may further go up to 9,512.

For the time, traders should avoid fresh positional longs, whereas shorting can be considered below 9,091 for a target of 8,850 with a stop above the intraday high, says Mazhar Mohammad of Chartviewindia.in.

Time to show-off your poker skills and win Rs.25 lakhs with no investment. Register Now!