Relief rally! Investors get richer by Rs 3 lakh crore as lockdown eases

A relief rally on D-Street helped benchmark indices to climb above their crucial resistance levels on June 1 as the government eased lockdown rules. Investors ignored the weak GDP data for the March quarter as well as muted factory activity for the month of May.

Investor wealth grew by over Rs 3 lakh crore in a single trading session. The average market capitalisation of the BSE-listed companies grew from Rs 127.06 lakh crore as on May 29 to Rs 130.10 lakh cr on June 1, BSE data showed.

Positive global cues, along with expectations of economic activity coming back to normal, and forecast of a normal monsoon lifted investor sentiment, suggest experts. The S&P BSE Sensex rallied over 1000 points in intraday trade while the Nifty50 witnessed profit taking above 9900 levels.

Let’s look at the final tally on D-Street – the S&P BSE Sensex rose 879 points to 33,303 while the Nifty50 rallied 245 points to close at 9826.

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“Markets ended positive, in sync with global cues, after relief over the opening up of the economy with some restrictions. All major sectoral indices were positive, with the banking index leading the gains,” Vinod Nair- Head of Research- Geojit Financial Services told Moneycontrol.

“The positive sentiment is being driven by hope of situation getting back to normalcy, aided by the steady opening up of the economy and further stimulus measures to boost demand. Economic data coming in over the next 2 days may have an impact,” he said.

All the sectoral indices closed in the green. The action was seen in consumer durables, metals, finance, banks, auto and energy stocks.

On the broader markets front – the S&P BSE Midcap index was up 2.6 percent while the S&P BSE Smallcap index rose over 3 percent – in line with benchmark indices.

Top Nifty gainers include names like SBI, M&M, Titan Company, Bajaj Finserv, and Bajaj Finance which rose 5-10 percent.

Top Nifty losers include names like Nestle India, UltraTech Cements, Bharti Infratel, and Dr Reddy’s Laboratories fell more than 2 percent each.

Stocks & Sectors:

Sectorally, the S&P BSE Consumer Durables index rose over 6 percent, followed by the S&P BSE Metal index which was up 3.9 percent, and the S&P BSE Finance and Bankex were up more than 3 percent each.

Volume spike of more than 100% was seen in stocks like PNB, Escorts, Adani Power, Bank of Baroda, Sun TV, Voltas, and PVR.

Long Buildup was seen in stocks like Shriram Transport Finance, Canara Bank, Voltas, Apollo Tyres, and UBL.

More than 50 stocks on the BSE hit their fresh 52-week high that include names like Bayer Cropsciences, Dixon Technologies, Divi’s Laboratories, Escorts, Cipla, Biocon, and Adani Green etc. among others.

Stocks in the News

Voltas | Share price surged 12 percent after the company reported a 12.5 percent jump in its consolidated Q4 FY20 net profit at Rs 159.5 crore against Rs 141.74 crore in the year-ago period.

Biocon | Stock price gained 8 percent after the company received favourable ruling from US Patent and Trademark Appeal Board (US PTAB).

PVR | The stock price was up 6 percent after the board of directors will meet on 8 June to consider and approve audited standalone and consolidated financial results and raising of funds by way of issue of equity shares of the company.

Rashtriya Chemicals and Fertilisers | The stock price was up 13 percent after the company reported a standalone profit after tax of Rs 142 crore in the March quarter, marking an increase of 193 percent from Rs 48 crore in the previous year.

Mahindra & Mahindra Financial Services| Shares was up over 3 percent after the non-bank lending arm of Mahindra group said that it will raise up to Rs,3,500 crore through a rights issue.

Adani Power makes an up move of over 9% ahead of board meet

Dr Reddy’ fail to cheer EIR for Srikakulam unit, stock slips 3%

Technical View:

Nifty50 made a strong bullish candle on the charts but could face resistance near 9,950-10,050. This is the fourth consecutive bullish candle made on daily charts

Nifty failed to hold onto 9900 levels

SuperTrend indicator gave a buy signal on the daily charts which suggest the momentum could well continue

MACD triggered a bullish crossover last week

The Nifty closed above 5-Days SMA

If Nifty closes above 9931 levels then next target shall be around 10159 levels, says Mazhar Mohammad of Chartviewindia.in

Considering almost a 10% of the rally in just 4 sessions from the lows of 9004 –9931 levels bulls may be in need of some breather and hence traders are advised to remain neutral for next one or two trading sessions and wait for dips into the strong support zone to create long positions, he said.

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