The S&P BSE Sensex rallied over 300 points on a day which was expected to remain volatile largely weighed down by concerns over the implementation of the goods & services tax (GST).
The action was more visible in individual stocks as more than 100 stocks rose to their fresh 52-week high on the BSE and almost 27 stocks hit a fresh record high on Monday.
Stocks which rose to fresh 52-week high on the BSE include names like ITC, Lakshmi Machine Works, AB Nuvo, Venky’s, Avanti, V-Mart, D-Mart, Shantai Industries, Colgate Palmolive India, Tata Steel, PG Electroplast, Thomas Cook, Graphite India etc. among others.
Stocks hitting fresh record highs include names like Polson Ltd, VST Industries, VST Tillers, Venky’s, V-Mart, Yuken, Veljan Denision Ltd, Tokyo Plast International Ltd, HIL, Asian Granito India, Rasoi, Veljan Denison Ltd etc. among others.
Indian market closed on a muted note for the week ended 30 June ahead of the rollout of one nation one tax on Friday midnight. A smooth rollout of Goods and Service Tax (GST) will be the key event which everybody was eyeing this week.
But, since the implementation, it has been a smooth rollout and which is what gets reflected in market sentiment.
The rollout of GST has been positive and largely hassle-free, with no checks on state borders, smooth customs operations and no major problems reported, said a report quoting government officials.
The government is now looking at a massive outreach to consumers as well as industry to clarify all issues and highlight the benefits of the tax regime, which came into effect on July 1.
The stocks which led gains on the S&P BSE Sensex include names like ITC which rose as much as 9.6 percent on the BSE after the Central Board of Excise and Customs (CBEC), over the weekend, removed excise and additional excise duty on cigarettes, while the National Calamity Contingent continued to remain.
Brokerage houses largely see this move as a positive for the stock and see more upside for it. They believe that this could translate into better volume growth and give the company a window to roll out low-cost cigarette models and gain market share.
Following the smart rally in ITC, the S&P BSE FMCG index rose over 3 percent, followed by S&P BSE Telecom which gained 1.7 percent, and BSE Metal Index rose 1.3 percent today. On the other hand, the S&P BSE Healthcare and power indices slipped marginally.
The Nifty made a small bullish candle on the daily candlestick charts after moving in a volatile range ahead of the rollout of GST on Friday. But, it managed to close above its crucial level of 9,500 which was a positive sign.
For the index to gain momentum, a close above 9,650 could take the index well above 9,700.
But, the relative strength index (RSI) of Nifty currently stands at 43 which indicates a negative trend as Nifty started to trade below its support level.
“The sideways movement in upcoming session can’t be ruled given the confusion over the growth projection out of GST regime followed by aggressive stance by regulators on bad loans signalling a volatile ride,” Dinesh Rohira, Founder & CEO, 5nance.com told Moneycontrol.
“However, if Nifty breaks past from its higher resistance level placed at 9,700, any breakout will give an upward momentum which could take the index towards 9,850-9,900 in the medium period,” he said.