Banks surge, Sensex and Nifty end the week on a high

The bulls continued to dominate Dalal-Street as key equity indices the Sensex and the Nifty rose about a percent each to end at six-month high on August 28, supported by strong gains in banking heavyweights.

The Sensex closed 354 points, or 0.90 percent, higher at 39,467.31 and the Nifty settled 88 points, or 0.76 percent, up at 11,647.60.

With this, the Sensex ended the week with gains of 2.7 percent and Nifty 2.4 percent. The Nifty Bank surged 10 percent this week.

The mood of the market remained exuberant on hopes of a speedy economic recovery and expectations of further fiscal and monetary support. Strong FII flow led by high global liquidity and decline in the US dollar fuelled the markets.

The rupee strengthened 43 paise to end at 73.39 (provisional) against the US dollar, supported by persistent foreign fund inflows and weak American currency.

Vinod Nair, Head of Research at Geojit Financial Services, said the Indian benchmark indices ended the week in gains following mixed global cues.

“Global markets were trading uncertain following the US Fed Reserve’s policy shift to focus on economic growth and less on inflation. However, the indication that the US Fed would continue to let interest rates remain low and expectation of more stimulus to follow, boosted the Indian markets,” he said.

“The stimulus and the associated liquidity are important to our markets since that has been one of the drivers for the current stock market run. As per NSDL, FPI net investments into equity, as a whole, have been around Rs 45,000 crore, which makes it one of the best months for net inflows,” Nair added.

Experts are of the view that the near-term trend of the Nifty continues to be positive and a sustainable movement for next week is likely to pull the Nifty towards the next upside levels of 12,000 and higher for the coming week.

Top Nifty gainers included IndusInd Bank, Axis Bank and UPL.

Top Nifty losers included JSW Steel, Hero MotoCorp and Dr. Reddy’s Labs.

Stocks & Sectors

The session belonged to financial stocks with the sector contributing about 89 points to the Nifty and five out of the top 10 Nifty gainers were financials.

The Nifty Bank index gained 4.19 percent to close at a five-month high at 24,588.95, marking its biggest single-day gain in three months.

The Nifty PSU Bank index closed 5.17 percent higher and the Nifty Private Bank index ended 4.70 percent up.

The Nifty auto, metal and FMCG indices ended in the red, falling 0.79 percent, 0.37 percent and 0.20 percent, respectively.

Volume spike of over 600 percent was seen in Canara Bank while Vodafone Idea saw a volume spike of more than 500 percent.

LIC Housing Finance saw a volume spike of over 300 percent and Indiabulls Housing Finance saw a volume spike of over 200 percent.

Volume spike of over 100 percent was seen in Bharti Infratel, NMDC and BHEL.

Long buildup was seen in stocks like Vodafone Idea, IndusInd Bank and NMDC.

Short buildup was seen in stocks like Ashok Leyland, Hero MotoCorp and Torrent Pharma.

Over 150 stocks, including Divi’s Labs, Dixon Tech, GMR Infra, NOCIL and Sun Pharma, hit their 52-week high on BSE.

Nearly 370 stocks, including Repco Home Finance, Welspun India and Future Consumer, hit their upper circuits on BSE.

Stocks in news

Shares of IndusInd Bank extended gains into the fifth consecutive session on BSE, closing 8.43 percent higher at Rs 656.60. UBS upgraded the stock to ‘buy’ from ‘sell’.

Shares of Max India fell 5 percent on BSE on the day of its relisting. The stock debuted at Rs 80 on BSE but fell 5 percent soon to touch its lower price band at Rs 76.

Shares of ICICI Bank jumped 4.41 percent while those of ICICI Securities rose 0.21 percent after the bank said it had sold 6,442,000 shares or 2 percent stake of ICICI Securities for Rs 310 crore via open market transaction.

Shares of NMDC surged 12 percent after the board approved a proposal to demerge its iron and steel plant in Nagarnar, Chhattisgarh.

Shares of Future Enterprises jumped 5 percent after media reports said that the company was all set to finalise the sale of the group’s retail business to Mukesh Ambani-led Reliance Industries Ltd’s retail arm on August 29.

Read more: Gainers & Losers: 10 stocks that moved the most on August 28

Technical View

The Nifty started the first day of the September series on a positive note. The index posted the best week in the month of August to hit a fresh 6-month high.

Experts say momentum is likely to continue, and traders should look at an initial target of 11,900 but it is critical for the index to sustain 11,589.

Positional traders who are still long on the Nifty can continue to hold with a stop below 11,589 on a closing basis, Mazhar Mohammad, Chief Strategist – Technical Research & Trading Advisory, said.