Closing Bell: Nifty ends above 10,400, Sensex jumps 498 pts led by financials; pharma dips

Taking Stock: Financials lead the rally on Street; Sensex back above 35,000

Top Nifty gainers include names like HDFC, UPL, Bajaj Finserv, and Axis Bank.... Read More

The short term trend of Nifty is positive. One may expect it to move up sharply above 10450 levels in the next 1-2 sessions. The next upside levels to be watched around 10550-10600. Immediate support is placed at 10380-10350 levels.

Technically the Nifty broke out of the rangetrade over the past three sessions and is now headed towards 10553. On dips 10338 could provide support.

Nifty has major resistance around 10500, and can be expected to have largely range-bound movement in the coming few sessions, in the absence of any major news trigger. Q1 results starting next week would present a true picture of the impact of the pandemic on corporate earnings.

Again, it’s the buoyancy of the global markets which aided surge amidst rising cases in India. Besides, though we’re seeing demand revival in select areas, it is still way lower compared to pre-COVID levels. Amid the mixed signals, we feel the upside could remain capped and traders should continue with positive yet cautious stance. We reiterate that the performance of the banking pack would play a critical role in the next directional move as other sectors, by and large, have done their part.

Nifty index managed to hold previous day’s close of 10300 zones and witnessed sustained buying interest throughout the day towards 10450 levels. It formed a Bullish Candle on daily scale and started to form higher highs - higher lows from past two trading sessions. It has given a consolidation breakout of last four trading sessions but requires a follow up action to start the next leg of rally. Index has been moving in a rising channel on daily scale by connecting swing lows of 7511, 9004, 9544, 9845, 10250, 10300 levels and supports are gradually higher. Now, it has to continue to hold above 10333 zones to witness an up move towards recent swing high of 10555 then even higher zones while on the downside immediate support is seen at 10300 then 10250 levels.

Nifty has been consolidating for the past few sessions and a close above 10400 is expected to invite momentum in the broader markets. Nifty has now formed a strong support at 10250; only a breach of the same is expected to invite selling pressure. Auto, Metals and Capital goods trade with a positive bias while BFSI is gaining momentum. IT and FMCG stocks expected to underperform.

Benchmark indices gained strength on the back of data showing that economic activity may be stabilizing. The gains were led by the banking index. The Nikkei PMI survey indicated that although activity contracted in June, it was at a much slower pace as compared to May month. This gives rise to the hope that the economy may be emerging out of one its worst periods in recent times. However, the continued rise in virus infections, and the resulting extension of lockdowns in many areas, may continue to slowdown and impact the economic recovery. Although the market trend is positive, the upside seems to be capped and investors are advised to follow a stock specific strategy.

The market was a tad shy of the 10450 level and went to 10447. If we manage to cross today's high tomorrow, we should be in bull territory and the markets would attempt a new high - 10700. The new support would now be 10250.

The market sentiment are cautious on fast spreading of coronavirus around the global and concern of the second wave of infections. Also, there are worries over reigniting US-China trade war, giving a boost to safe-haven demand for gold. Today, the MCX Gold has hit a fresh all time high of Rs.48,982/10 gms and is hovering around Rs 48910/10 gms. At the same time, MCX silver continued to trade close to all time high of 50000.

Currently the recent high in gold is acting as a crucial resistance and we may see small correction in prices till 47500/47000. However, the ongoing geopolitical tensions will boost safe-haven demand for gold and once it cross and sustains above 49000 then 49750-50600 is expected. Dips will find buying support until 47000 holds and prices will again bounce back towards 48500/49000 levels.

While in silver, MCX Sep prices will test its immediate resistance between 51235-51500 areas. The counter needs to trade above these areas for a breakout towards 52400/54000 areas. Failure to trade above 51500 will trigger a correction towards 49750/48800 areas.

Gold prices are on an up move due to global uncertainty, the number of new COVID19 cases are on the rise. US Federal Reserve Chairman has stressed the need to control the virus else it may affect the recovery of the US economy.

Gold prices have rallied nearly 24% this year, it had the best quarter (April-June) in more than 4 years in terms of price rise. Internationally, Gold price is near an 8-year high, trading around the USD 1800/oz.

Easy liquidity by central banks across the globe has pushed interest rates down, making gold an attractive investment bet which is also considered a hedge against inflation and a safe haven in times of uncertainties.

Trade tensions between US-China is another worry as it may delay economic recovery and lead to a further rise in prices of the yellow metal.

A revival in GST collections during June and a smart comeback by the Banking Sector buoyed sentiments as the market rose over in trade today. The broader market too exhibited strength as savvy investors were seen lapping up select counters who seem to be less impacted from the Pandemic.

: Benchmark indices ended higher with Nifty above 10400 supported by the financials and FMCG stocks.

At close, the Sensex was up 498.65 points or 1.43% at 35414.45, and the Nifty was up 127.90 points or 1.24% at 10430. About 1486 shares have advanced, 1251 shares declined, and 120 shares are unchanged.

Axis Bank, Bajaj Finserv, UPL, HDFC and ITC were among major gainers on the Nifty, while losers were Nestle, NTPC, Shree Cements, L&T and Cipla.

Among sectors, buying seen in the banks, FMCG, energy and metal, while pharma was under pressure. BSE Midcap and Smallcap indices ended with marginal gains.