Sensex scales Mount 36K, Nifty back above 10,600

The bulls remained in control of D-Street on July 3, pushing the S&P BSE Sensex above 36,000 while the Nifty50 closed above its crucial resistance of 10,600.

The Nifty50 rallied for the third consecutive day in a row, supported by positive global cues and on weekly basis, the index recorded gains of more than 2 percent, buoyed by hopes of a vaccine for COVID-19 and recovery in economic activity.

The BSE Sensex ended 177 points higher at 36,021 while the Nifty50 rose 55 points to 10,607.

“The benchmark indices ended with a gain of 2.4%, on a weekly basis, as optimism about a continued recovery in economic activity offset concerns raised by an unabated rise in virus infections. Globally, the US monthly employment report and domestically, the PMI survey seemed to indicate that the worst of the lockdown economic impact is over,” Vinod Nair, Head of Research at Geojit Financial Services told Moneycontrol.

However, any extension or resetting of lockdown measures due to increasing infections could negate the gains. Progress of vaccine trials also added to the optimism, he said.

Despite improving economic data, markets were largely moving on hope rather than on ground realities. With intraday volatility increasing, investors should are remain cautious, he said.

Sectorally, the action was seen in telecom, power, capital goods, energy, and IT while profit-taking was seen in metals, banks, and finance stocks.

On the broader markets front, the S&P BSE Midcap index rose 0.5 percent while the S&P BSE Smallcap index rose 0.4 percent.

Top Nifty gainers included Hero MotoCorp, Adani Ports, Bharti Airtel and Eicher Motors.

Top Nifty losers included HDFC Bank, IndusInd Bank, Tata Steel, and JSW Steel.

Stocks & Sectors

Sectorally, the S&P BSE Telecom index rose 3.4 percent followed by the S&P BSE Power index which was up 1.7 percent and the S&P BSE Capital Goods index gained 1.6 percent.

The S&P BSE Metal index was down 0.5 percent, the S&P BSE Bankex fell 0.39 percent and the S&P BSE Finance index ended 0.36 percent lower.

Volume spike of more than 100 percent was seen in stocks like Bharti Airtel, Bharat Forge, Siemens, Adani Ports and HDFC Life.

Long buildup was seen in stocks like Bata India, Indiabulls Housing Finance and Balkrishna Industries.

Short Buildup was seen in stocks like LIC Housing Finance, Cadila Healthcare and Shriram Transport.

More than 100 stocks on the BSE hit a 52-week high. These included Bayer Cropscience, VST Tillers, Balkrishna Industries and IOL Chemicals.

Stocks in news

HDFC Life Insurance Company stock gained over 4 percent after a media report said the stock would be a part of Nifty50 on the last day of July following a semi-annual review of the index.

Motherson Sumi Systems share price fell over 5 percent after the company board approved the demerger of its Domestic Wiring Harness (DWH) business from MSSL into a new company.

Reliance Industries stock gained over a percent after the announcement that the American semiconductor giant Intel Corp was picking a stake in the company’s digital arm Jio Platforms.

Muthoot Finance stock jumped over 3 percent after the company said that the board of directors would meet on July 18 to consider and approve the proposal for sub-division / stock split of equity shares.

Bharti Airtel stock jumped 4 percent after Bharti Enterprises emerged the top bidder for acquiring a stake in OneWeb, a UK-based company.

Defence stocks gained on July 3, a day after India approved the purchase of 33 Russian fighter jets and upgrades to 59 war planes at a cost of Rs 18,148 crore amid rising tensions with China.

Technical View

The Nifty formed a small-body Bearish candle as it closed lower than its opening levels.

It continued the formation of higher lows on a weekly scale as well while supports are gradually shifting higher, which suggest an overall bullish stance, say experts.

The Nifty has to continue to hold above 10,500 to extend its move towards 10,800. On the downside, support is seen at 10,450 then 10,333 levels, said Chandan Taparia of Motilal Oswal Financial Services Limited.

Disclosure: Reliance Industries Ltd. is the sole beneficiary of Independent Media Trust which controls Network18 Media & Investments Ltd.

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