Closing Bell: Nifty ends near 13,400, Sensex gains 181 pts; metal, pharma stocks slip

Taking Stock | Bull-run Continues, Nifty Ends Near 13,400; PSU Banks Outperform

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Markets traded volatile in a range but managed to end higher, in continuation to the prevailing uptrend. Initially, favorable global cues helped the benchmark to inch higher but profit-taking at the higher levels erased all the gains. The benchmark hovered in a range thereafter while movement on the broader front kept the participants busy. In line with the benchmark index, volatility remained high on the sectoral front too while the broader indices ended on a flat note.

We feel markets have priced in all the positives (vaccine updates, high FII flows, etc) and now the upcoming domestic macroeconomic data viz. IIP, CPI and WPI would be critical for further directional move. Having said that, we reiterate our view to continue with the trend and avoid contrarian trades.

Since November, PSU banks have been outperforming the market and this rally continued and took Indian benchmark indices to new highs in today’s volatile session. Reports of emergency vaccine rollout in India and hopes of a stimulus package in the US and Japan has also helped in keeping momentum live. European stocks are experiencing negative waves due to fading hopes of Brexit trade talks and an increasing number of covid cases. Although the markets are at an all-time high, the expected updates on vaccine rollouts and stimulus packages have the potential to take markets further.

Indices stayed buoyant despite volatility as IT majors did well along with support from key heavyweights. The highlight of the day was PSU banks as the space witnessed tremendous interest from investors.

The markets have closed within the resistance passage of 13400-13700. There is always a possibility of turning around from these levels and correcting. The overall trend continues to remain positive, but traders should exercise caution at these levels of the Nifty. Strict stop losses should be maintained for all long trades.

Buying continued on the Dalal Street with Sensex ended higher for the fourth and Nifty for sixth consecutive session on December 8.

At close, the Sensex was up 181.54 points or 0.40% at 45,608.51, and the Nifty was up 37.20 points or 0.28% at 13,393. About 1344 shares have advanced, 1374 shares declined, and 130 shares are unchanged.

UltraTech Cement, TCS, Reliance Industries, Wipro and HCL Tech were among major gainers on the Nifty, while losers were Sun Pharma, Hindalco Industries, IndusInd Bank, Coal India and Adani Ports.

Nifty metal and pharma indices shed 1 percent each, while PSU Bank index added over 7 percent. BSE Midcap and Smallcap indices ended with marginal losses.

The market breakout above the Nifty 50 Index level of 13340. As of now, the short-term technical condition of the market shows an upward shift of the prevailing market range and it is likely to range between 13290 and 13480. The market breadth to improve further along with other momentum indicators like RSI, MACD, indicating the presence of an uptrend. We expect the market to gain momentum, that could lead to an upside projection till the 13480 levels.

The strong performance of the equity markets in November seem to have encouraged more investors to book profits and move to short term investments. We still believe that there is significant amount of money that can come back to the market in the event of any correction. The medium to long term potential of the equity markets remain strong.

SIP numbers have remained robust which is a good indication of continued retail interest. It must be kept in mind that since the last three days of November were non-business days, a significant amount of SIP flows might not be reflected in the official numbers that have been released.

Indian rupee has extended the gains and trading higher by 19 paise at 73.71 per dollar, amid volatile trading seen in the domestic equity market.It opened 8 paise higher at 73.82 per dollar against previous close of 73.90.

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TVS Srichakra share price added 7 percent on December 8 as the company planned capital expenditure of Rs 1,000 to ramp up manufacturing in its Madurai and Pantnagar plants.

This investment is planned to be made over a three year period and investment, when fully made, will result in an increase in 2 & 3 wheeler tyre capacity by 25-30% and doubling of off-highway tyre capacity from current levels.

International gold and silver prices rose on December 8 supported by expectations of fresh fiscal stimulus in the US. Domestic gold and silver surged higher, taking a cue from firm overseas prices.Domestic bullion could trade flat to marginally higher on December 8, tracking the international prices.

Technically, MCX Gold February gave a breakout with huge volume activity indicating a strong momentum in the counter. In addition, it has given a breakout above Rs 49,500 levels where further upside could see Rs 50,080-50,300 levels. Support is at Rs 49,700-49,500.

MCX Silver March bounced back from Rs 62,380 and gave a close above Rs 65,300 with more than 2.5 percent gains. Resistance is near Rs 66,350-67,200 and support at Rs 64,600-63,300 .