The Nifty Bank index rose over 300 points to record its fresh record high of 23,806.65 in trade today, led by gains in Axis Bank, Canara Bank, HDFC Bank, ICICI Bank, IndusInd Bank, SBI, and Kotak Mahindra Bank.
The S&P BSE Sensex rallied as much as 306 points in trade on Monday while the Nifty surged above its crucial resistance level of 9,650 to record a fresh breakout on the index.
The Sensex closed up 255.17 points at 31311.57, while the Nifty ended higher by 69.50 points at 9657.55.
Tracking the momentum, as much as 136 stocks hit fresh 52-week highs on the BSE which include names like Can Fin Homes, HDFC Bank, BEML, Lux Industries, Kotak Mahindra Bank, UPL, Colgate Palmolive India Ltd, and Monsanto India Ltd etc. among others.
The star of Monday’s trading sessions was rate sensitive of banking stocks. The Nifty Bank index rose over 300 points to record its fresh record high of 23,806.65 in trade today, led by gains in Axis Bank, Canara Bank, HDFC Bank, ICICI Bank, IndusInd Bank, SBI, and Kotak Mahindra Bank.
However, Ashwani Gujral of Ashwanigujral.com said that there not enough shorts in the system which could take the Nifty Bank even higher. Hence, there is a likely possibility that the index will trade in a broad range.
Among the stocks, as much as 42 scrips on the BSE hit fresh record highs which include names like Sutlej, Asian Granito, Jayant Agro, Vishal Fabrics, SNL Bearings Ltd, International Combustion India Ltd, BASF, and Rane Holdings Ltd among others.
From the options front, since the inception of the June series the highest Put base is placed at the 9500 strike while Call base has remained at 9700 strike.
In the current uptrend, the Nifty has not tested its major Put base. Thus moving below 9500 may not bode well with the current uptrend. Further, fresh up move towards 9800 should be played only if Nifty closes above 9,650 on a closing basis, suggest experts.
“The short-covering trend in Nifty futures continued in the June series. At the same time, Nifty Bank open interest has reduced drastically by almost 28% since May series,” ICICI Securities said in a report.
“Looking at the lower cost of carry in banking space, it seems scepticism is still prevailing in the index despite trading near life-time high levels,” it said.The volatility index continues to trade lower and saw no impact of Fed rate hike along with intermediate profit bookings in the market. “However, move above 12 for India VIX should be considered as a caution in coming sessions,” said the ICICI report.