Sensex snaps 5-day fall, up 235 pts amid easing geopolitical woes; Midcap shines
Equity benchmarks closed sharply higher on Monday, with the Sensex rising more than 300 points intraday amid easing of geopolitical tensions between US and North Korea. The market had fallen 3.5 percent in previous five consecutive sessions.
The 30-share BSE Sensex was up 235.44 points at 31,449.03, backed by short covering as well as value buying in banking & financials, metals, pharma, auto stocks and Reliance Industries.
The 50-share NSE Nifty failed to hold 9,800 level, up 83.35 points at 9,794.15.
The broader markets posted strong gains, with the BSE Midcap and Smallcap indices soaring 2.5 percent each on positive breadth. About 1,890 shares advanced against 707 declining shares on the exchange.
Jayant Manglik, President, Retail Distribution at Religare Securities feels it’s just a bounce due to bargain hunting and traders should wait for confirmation on trend resumption.
“Nifty requires decisive breakout above 9950 for sustainable up move else consolidation will continue. Keep a close watch on global developments especially the ongoing geo-political issues,” he said.
According to Amit Gupta of ICICIdirect, major recovery in Nifty seems unlikely and immediate upsides are likely to find hurdle near 9950 levels.
On downsides, he believes 9650 levels will be the support for Nifty in the short term.
European stocks rallied sharply after senior US officials sought to play down risks of a military conflict with North Korea. France’s CAC and Germany’s DAX were up 1 percent each while Britain’s FTSE gained 0.6 percent at the time of writing this article. Asian markets also closed higher after Japan GDP beats expectations.
Meanwhile, investors will closely watch July CPI inflation data due later today. WPI inflation, which announced during market hours, increased to 1.88 percent in July from 0.9 percent in previous month due to higher food prices.
All sectoral indices barring IT closed in green. Nifty Metal, Pharma and Realty indices gained the most, up 3-6 percent while IT lost half a percent.
PSU lenders State Bank of India was down nearly 1 percent and Bank of Baroda fell 0.25 percent as analysts slashed their target price on stocks after disappointing quarterly earnings and rising non-performing assets.
Grasim and Tata Power shares gained 4-5 percent on better-than-expected earnings for the quarter ended June 2017.
Reliance Industries was leading contributor to Sensex’ gains, up 1.7 percent while Bharti Airtel lost a percent. Reliance Jio added 6.03 million subscribers in June and Bharti Airtel 2.05 million.
Disclosure: Reliance Industries Ltd. is the sole beneficiary of Independent Media Trust which controls Network18 Media & Investments Ltd.
Reliance Communications surged 16 percent after the National Company Law Tribunal has passed order, allowing the merger between the company and Aircel and tower sale to Brookfield.
Sun Pharma recovered sharply from its day’s low, up 5 percent despite subdued numbers in Q1. Adani Ports gained 3 percent after numbers beat analysts’ expectations.
HDFC, ICICI Bank, Maruti Suzuki, L&T, Tata Steel, Hero MotoCorp, Cipla and Lupin gained up to 5 percent whereas Kotak Mahindra Bank, Infosys and TCS lost 1 percent.
