Taking Stock: Nifty climbs Mount 11K; Sensex rallies nearly 400 points

The bulls took control of D-Street from the word go to push the Nifty50 above the crucial 11,000-mark on a closing basis on July 20, tracking strong momentum in IT after the June quarter results and banking stocks.

Indian markets closed higher for a fourth straight session, with the S&P BSE Sensex rising 398 points to 37,418 while the Nifty50 ended with gains of 120 points to 11,022 at a fresh four-month high.

Better-than-expected earnings for Q1FY21 from Nifty majors cheered investors. The mood was further strengthened with buying interest in private banking and FMCG majors.

Markets were largely focusing on earnings and the recent announcements from the index majors positively surprised the market, which in turn fuelled the recovery, Ajit Mishra, VP – Research, Religare Broking Ltd, said.

“Besides, the global markets are also not showing any signs of slowing down, helping the index to maintain the prevailing momentum,” Mishra said.

The rising coronavirus cases and talk of community transmission could dent the pace ahead. “We suggest focusing more on risk management and preferring quality counters for trading and investment,” Mishra said.

Sectorally, action was seen in IT, telecom, finance, banks and consumer durable stocks while selling pressure was visible in healthcare, power, capital goods and utilities.

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

On the global front, Asian shares ended mostly lower, as a spike in global coronavirus weighed on sentiment except in India.

Top Nifty gainers included UPL, Bajaj Finserv, HCL Technologies, Bajaj Finance and Britannia Industries.

BPCL, ZEE Entertainment, Cipla, and Sun Pharma were among top Nifty losers.

Stocks & Sectors

Sectorally, the S&P BSE IT index rose 2.3 percent followed by the S&P BSE Telecom index that gained 1.6 percent and the S&P BSE Finance index was up 1.6 percent.

Selling pressure was visible in the BSE Healthcare Index that was down 0.6 percent followed by the S&P BSE Power index, which fell 0.2 percent, and the S&P BSE Capital Goods index was down 0.13 percent.

A volume spike of more than 100 percent was seen in Bajaj Finserv, Siemens, Canara Bank, Tata Chemicals, PNB and M&M Financial.

Long Buildup was seen in stocks like M&M Financial, Adani Enterprises and Hero MotoCorp. Short Buildup was seen in stocks like Kotak Mahindra Bank, Sun Pharma and Lupin.

Dixion Tech, Britannia Industries, Info Edge, and Aarti Drugs were among more than 100 stocks on the BSE to hit a fresh 52-week high.

Stocks in News

Britannia Industries’ share price jumped over 5 percent after brokerages hailed the company’s Q1 show as better-than-expected.

HDFC Bank stock gained almost 3 percent after the private lender reported a 19.6 percent year-on-year growth in standalone profit for the June quarter led by lower tax cost and NII.

Federal Bank stock was up 3 percent after investor Rakesh Jhunhjunwala bought an additional 20 lakh shares in the April-June quarter.

M&M Financial Services shares jumped 10 percent after the company posted robust numbers for the June quarter and the board approved a rights issue.

IIFL Securities stock price tanked 20 percent after the company reported a weak set of numbers for the June quarter.

Telecom stocks ended in the green as the Supreme Court heard arguments on the government’s petition to allow telecom companies, including Bharti Airtel and Vodafone Idea, to make staggered payments of the adjusted gross revenue over a 20-year period.

Hathway Cable & Datacom stock jumped 10 percent after the company reported a consolidated net profit of Rs 66.06 crore in the June quarter compared with a net loss of Rs 9.38 crore in the same quarter in 2019.

Technical View

The Nifty50 formed a small bullish candle on the charts that resembled a Doji formation, an indecisive formation that does not auger well for the bulls.

Right now the momentum is in the favour of the bulls and one should only remain optimistic and look for higher targets placed around 11,250 levels unless the Nifty registers a close below 10,867 that may bring back the bears, say experts.

If the Nifty manages to close above 11,250, then the rally can extend into the bearish gap zone of 11,384–536 levels registered on February 28, Mazhar Mohammad of Chartviewindia.in said.

“Considering the fact that the Nifty is facing resistance at every 100 points on the upside, traders are advised to give preference to book profits in the next session rather than creating fresh longs at current levels,” he said.