No Monday blues! Sensex up more than 400 points, Nifty flirts with 10,800

No Monday blues on D-Street! Continuing with the previous week’s momentum, the bulls pushed the Indian market for the fourth consecutive day to a fresh four-month high on July 6. The S&P BSE Sensex rallied by over 400 points while the Nifty50 had a touch-and-go moment with 10,800.

The S&P BSE Sensex ended the day 465 points higher at 36,487 while the Nifty50 rose 156 points to close at 10,763.

Experts are of the view that disengagement between India and China in the Galwan Valley and strong macro data on the global front lifted sentiment.

“Indian indices ended with gains in sync with solid global cues. Global markets rallied on hopes of a faster Chinese economic revival, which could provide support to the global economy. The positivity regarding the recovery is extending to Indian markets also, in spite of surging infections, along with liquidity,” Vinod Nair, Head of Research at Geojit Financial Services told Moneycontrol.

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“The first signs of de-escalation of India –China border tensions should also calm the markets. We maintain the sell-on-rise strategy and advise investors to trade with caution.”

The broader markets were in line with benchmark indices. The S&P BSE Midcap index rose 1.2 percent while the S&P BSE Smallcap index rallied 1.3 percent .

Sectorally, the action was seen in energy, realty, auto, metals, and consumer discretionary stocks while profit-taking was visible in FMCG, telecom, and healthcare stocks.

The India Volatility index ended at a four-month low, down 2.2 percent to 25.19.

Top Sensex gainers included RIL, Tata Motors, Hindalco Industries and Bajaj Finance.

Top Sensex losers included HDFC, Wipro, GAIL India, and Bajaj Auto.

Stocks & Sectors

Sectorally, the S&P BSE Energy index rose 2.9 percent followed by the S&P BSE Realty index, which was up 2.9 percent and the S&P BSE Auto index closed with gains of 2.9 percent.

Profit-taking was seen in S&P BSE FMCG index that was down 0.8 percent followed by the telecom index that fell 0.6 percent and the healthcare index ended 0.19 percent lower.

Volume spike of more than 100 percent was seen in stocks like PNB, NCC, Ashok Leyland, Container Corp and SRF.

Long Buildup was seen in stocks like SRF, Cummins India and Century Textiles.

Short Buildup was seen in stocks like Equitas, IGL and Godrej Consumer Products.

More than 100 stocks hit a new 52-week high. These included RIL, Aarti Drugs, Tasty Bite, Balkrishna Industries, Escorts and IOL Chemicals.

Stocks in news

Power Mech Projects stock jumped 5 percent after the company won projects worth Rs 1,507 crore.

HDFC Bank stock added over 2 percent after the private banking major said on July 4 that its advances grew 21 percent year-on-year (YoY) in the April-June quarter to Rs 10,04,500 crore.

Aksh Optifibre share fell almost 5 percent after an independent director of the Delhi-based optic fibre-maker wrote to the board and the finance ministry accusing its promoters of siphoning off at least Rs 600 crore.

Prism Johnson stock spiked 10 percent after the board approved divestment of the entire stake in the insurance arm.

Sobha share price gained over 5 percent after the company clocked a 70 percent jump in sales volume during Q1 FY21 as compared to Q4 FY20.

Ircon International stock jumped over 11 percent after the company inked a pact with NIIFL and Ayana Renewable Power for exploring opportunities in the solar energy sector in June.

Technical View

The Nifty50 formed a small bull candle on the daily charts.

Although profit-taking was visible at higher levels, the trend remains on the upside in the near term.

The immediate hurdle for the index is seen near 200-DMA placed at around 10900 levels.

A close below 10,695 (intraday low) will lead to some more profit-taking while a close above 10,900 could take the index towards 11,240, say experts.

“Considering the narrow intraday trading range, we advise traders to remain neutral on the index and they should refrain from creating short positions unless some signs of reversal are visible,” Mazhar Mohammad of Chartviewindia.in said.

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

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