Taking Stock: RBI commentary helps bulls push Sensex higher; Nifty reclaims 11,200

The bulls managed to retain control on a volatile day of trading to push the benchmark indices above crucial resistance levels on August 6, with the S&P BSE Sensex reclaiming the 38,000-mark and the Nifty50 climbing to 11,200.

The Sensex ended the day 362 points higher at 38,025 while the Nifty50 rose 98 points to close at 11,200.

Strong global cues and the Reserve Bank of India (RBI) commentary measures to support stressed sector helped the sentiment. Though the central banks kept the rates unchanged, experts say a 25-50 bps cut is still possible by March 2021.

“Markets managed to gain nearly a percent amid volatility, thanks to supportive global markets and favorable local cues. The bias was upbeat from the beginning and the benchmark extended gains as the day progressed, taking cues from the RBI’s announcements to aid the stressed sectors and further boost the financial system,” Ajit Mishra, VP – Research, Religare Broking Ltd told .

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Though some profit-taking was witnessed in the middle, buying interest in the last hour again pushed the markets higher, he said. A mixed trend was witnessed on the sectoral front, while the broader markets posted decent gains.

Sectorally, the action was seen in IT, FMCG, consumer durables, and metal index, while profit-taking was visible in telecom, capital goods, and power stocks.

On the broader markets front, the S&P BSE Midcap index rose 0.7 percent, while the S&P BSE Smallcap index closed with gains of 1 percent.

Top Nifty gainers included UPL, HCL Technologies, Bajaj Finance and Infosys.

Top Nifty losers included M&M, Adani Ports, Bajaj Finance, and Infosys.

Stocks & Sectors

Sectorally, the S&P BSE IT index rose 2.2 percent followed by the S&P BSE FMCG index that was up 1.3 percent and the S&P BSE Consumer Durable index gained 1.2 percent.

Mild profit-booking was seen in stocks like telecom (down 0.3 percent) followed by capital goods (down 0.29 percent) and power index (down 0.09 percent).

Volume spike of more than 100 percent was seen in GAIL India, Canara Bank, NIIT Tech, and Muthoot Finance.

Long buildup was seen in stocks like Federal Bank, M&M Finance, and NIIT Tech.

Short buildup was seen in stocks like Canara Bank, Muthoot Finance, and Bata India.

More than 100 stocks on the BSE hit a fresh 52-week high. These included Wabco, Info Edge, and Torrent Pharma.

Stocks in news

Muthoot & Manappuram Finance slipped as RBI’s decision to raise gold LTV would not be applicable to NBFCs.

Adani Power closed marginally lower after reporting weak Q1 earnings.

Birlasoft stock price surged over 15 percent after the company reported a nearly 35 percent rise in consolidated net profit for Q1 FY21.

Hindustan Zinc share price jumped more than 8 percent after Citi maintained ‘buy’ call on the stock.

Indoco Remedies shares spiked 7 percent after the company announced getting approval for its ANDA for Olanzapine Tablets.

Adani Gas stock shed over 3 percent after the company’s net profit fell 42 percent to Rs 46 crore during the quarter ended 30 June from Rs 79 crore in the same quarter of the previous fiscal.

Unichem Laboratories stock gained a percent after the company received ANDA approval for its Tolterodine Tartrate Tablets, USP 1 mg and 2 mg from the United States Food and Drug Administration (USFDA) to market a generic version of DETROL (tolterodine tartrate) tablets of Pfizer Inc.

National Fertilizers stock was up over 2 percent after the company reached all-time high fertilizer sales of 18.79 lakh MT in April-July 2020, a growth of more than 20 percent YoY.

Technical View

The Nifty formed a Doji candle on the daily charts.

The bulls managed to use the decline as a buying opportunity to take it back towards 11,200 zones.

The Nifty has been making higher lows from the past three trading sessions and supports are shifting slightly higher.

The Nifty has to hold above 11,100 zones for an up move towards recent swing high of 11,333-11,350, while on the downside, support exists at 11,050 then 11,000 zones, Chandan Taparia, of Motilal Oswal Financial Services Limited said.