Sensex has a touch-and-go moment with 36K, Nifty at 4-month high

The bulls took control of D-Street from the word go to push the S&P BSE Sensex above 36,000 during intraday trade on July 2 while the Nifty50 closed above the crucial resistance level of 10,500.

Benchmark indices rallied more than 1 percent each to put up their best performance in four months, taking a cue from as global markets that remained buoyant over encouraging coronavirus vaccine trials.

The Sensex closed 429 points higher at 35,843 while the Nifty50 ended at 10,551, up 121 points.

“The Indian indices traded in sync with global cues and ended the day with gains. The gains were supported by IT and auto indices. Global indices were positive following news of encouraging trials of a vaccine being developed for the virus,” Vinod Nair, Head of Research at Geojit Financial Services told .

related news

“Global markets are awaiting US employment figures, due out later today, to see the progress of the US economy and its resultant impact on global economic growth.”

So what should investors do? Nair is of the view that Indian benchmark indices have sustained their momentum while upsides seem to be limited.

Investors are advised to watch out for any signs of trend reversal and keep booking short- term profits.

Sectorally, action was seen in auto, IT, consumer durable, consumer discretionary, and capital goods stocks while profit-taking was visible in banks.

On the broader markets, the S&P BSE Midcap index rose 1.04 percent while the S&P BSE Smallcap index closed with gains of 0.9 percent.

Top Nifty gainers included IOC, Cipla, Titan Company, Here MotoCorp and M&M.

Top Nifty losers included HUL, UPL, Vedanta and Axis Bank.

Stocks & Sectors

Sectorally, the S&P BSE Auto index rose 2.8 percent, S&P BSE IT index which was up 2.9 percent, and the S&P BSE Consumer Durable index was up 2.7 percent.

A volume spike of more than 100 percent was seen in stocks like SAIL, Tech Mahindra, HCL Tech, Voltas and Motherson Sumi.

Long buildup was seen in stocks like Motherson Sumi, Tata Power and UBL.

Short buildup was seen in stocks like Divi’s Laboratories and Lupin.

More than 100 stocks hit a fresh 52-week high. These included Bayer CropSciences, Navin Fluorine, Jubilant Life, IOL Chemicals and Eveready Industries.

Stocks in news

Auto companies rallied after reporting a major improvement in auto sales in June on a month-on-month basis.

Amongst OMCs, BPCL & IOC rallied 1-3 percent while HPCL slipped more than 3 percent.

Railways stocks gained 4-11 percent on July 2 after the ministry of railways invited proposals from private entities to run passenger trains.

Mahindra & Mahindra stock jumped over 6 percent after the company came out with its sales figures for June that showed an uptick in tractor demand.

Dilip Buildcon stock gained over 5 percent after the company emerged as L-1 bidder through JV for EPC project.

Axis Bank stock was down 2 percent after the private lender said it was planning to raise up to Rs 15,000 crore through the issuance of various instruments.

ONGC share price gained over 2 percent after a media report said that India’s latest oil and gas block bid round attracted only 12 bids for the 11 areas on offer, with 10 of them getting single bids from state-owned ONGC and Oil India Ltd, upstream regulator DGH said.

Tata Power Company stock jumped over 7 percent after the board approved issuance of equity shares of face value of Re 1 to Tata Sons Private Limited, the promoter of the company, on a preferential basis at a price of Rs 53 per equity share aggregating to Rs 2,600 crore.

MOIL stock surged over 8 percent on July 2. The company has fixed and revised prices of different grades of manganese ore and other products, effective July 1, 2020

IDBI Bank stock jumped 5 percent with the bank’s market capitalisation crossing the Rs 50,000-crore mark.

Technical View

The Nifty formed a bullish candle on the daily charts.

The index, however, failed to close above the swing high of 10,553, which is a slightly worrying sign for the bulls

Unless a strong close is witnessed in the next session, the rally may not last and the weakness will be confirmed on a close below 10485, Mazhar Mohammad of said.

A close above 10600 in the next session could take the Nifty towards 10,670 and beyond that the test of 200-day moving average, whose value is around 10890, looks inevitable.

For the time, traders who are long are advised to hold with a stop below 10,485 on a closing basis and look for an initial target of 10,669, Mohammad said.