Closing Bell: Nifty ends above 16,900, Sensex gains 1,041 pts led by IT, metal, realty

Dalal Street staged a spectacular rebound, echoing global stock markets’ optimism amidst oversold conditions, with Fed's decision to hike rates by 75 bps gave Nifty bulls a signal to rise.

The positive takeaway was that the benchmark Nifty and many momentum stocks shined all-throughout the day. The buying stampede simply continued. Technically speaking, if Nifty’s holds above its make-or-break support at 15621 mark then the interweek trading theme could shift to ‘Enthused Bulls and Arrested Bears’.

The USDINR spot closed 14 paise lower at 79.75, thanks to the less than hawkish stance of the US Fed. With the US Fed hinting that they are looking to slow the pace of rate hikes in the upcoming meetings, USD saw profit taking.

Risk on mood in equity markets also helped the Rupee. Over the near term, we expect USDINR to trade with a negative bias within a range of 79.40 and 80.00 on spot.

Indian benchmark indices outperformed their Asian peers on the last day of the current month expiry, as there was no surprise in the rate hike decision by the US Federal Reserve which came on expected lines, fuelling a rally in the US markets. The upbeat mood also had a rub off effect on the domestic market, leading to buying in banking, IT, metals and realty stocks.

Investors feel that RBI too may not sprung any major surprise in the next week's monetary policy meeting on hopes inflation will see a downward curve going ahead.

Technically, the Nifty has formed a long bullish candle on daily charts which is largely positive. The short term trend is looking positive but due to temporary overbought situations we could see some profit booking at higher levels. For traders, the 200-day SMA (Simple Moving Average) of 17025 and 17100 would act as immediate resistance levels. On the flip side, 16800-16750 could be key support levels.

The Bank Nifty index continued its upward momentum and surpassed the immediate hurdle of 37,000. The index remains in a buy mode with immediate support at the 37,000-36,800 zone.

The next hurdle is placed at 38,000 where a significant amount of call writing has been witnessed. The RSI remains in a buy zone as long as it is trading above the level of 60.

Nifty has moved above its previous swing high, suggesting a rising bullishness. Besides, a bullish crossover of short-term moving averages is likely to provide tailwind to the index value over the short term.

On the higher end, resistance is visible at 17000/17200 whereas on the lower end, support is visible at 16700.

With a gap up opening, it crossed the swing high of around 16750 & went on to cross the June high of about 16800. The bulls maintained upper hand throughout the day. Thus 16750-16800 now becomes a near term support zone.

As long as the index trades above this zone it can continue to march higher towards 17000 where there is 61.8% retracement of the April – June decline & the 200 DMA. If the bulls manage to take out the level of 17000, then the index can stretch towards 17200 in the short term

Positive cues from global markets following the Fed policy outcome, as well as domestic large caps’ upbeat earnings, drove the market rally. The Fed's decision was as expected, while their positive comment dismissing the possibility of a recession and hinting at a slower pace of rate hikes in the coming months boosted global sentiments.

As a result, the Indian rupee strengthened, potentially attracting foreign funds into the domestic market. Domestic investors are now bracing for the RBI's MPC meet next week expecting a rate hike by 25-50 basis points.

US Fed hiked the policy rates by 75bps which was on expected lines and largely factored in by the market. Moreover the tone of Fed’s chairman was less hawkish compared to previous statement which receded some fears and uplifted the sentiments.

Going ahead, the rate hikes would be more data driven and would be determined by the behaviour of inflation. Fed chairman ruled out US recession possibility also at this juncture.

We expect it to have positive rub off on the RBI MPC where the latter might slow down its aggression and hike rates by 25bps in its next MPC.

Indian rupee ended higher by 15 paise at 79.75 per dollar against previous close of 79.90.

Benchmark indices ended higher for the second consecutive day on July 28 with Nifty closing above 16900.

At Close, the Sensex was up 1,041.47 points or 1.87% at 56,857.79, and the Nifty was up 287.80 points or 1.73% at 16,929.60. About 1865 shares have advanced, 1389 shares declined, and 141 shares are unchanged.

Bajaj Finance, Bajaj Finserv, Kotak Mahindra Bank, IndusInd Bank and SBI Life Insurance were among major gainers on the Nifty, while losers included Shree Cements, Bharti Airtel, UltraTech Cement, Cipla and Bajaj Auto.

Among sectors, Bank, IT, Metal, Power, Realty up 1-2 percent.

BSE Midcap index added nearly 1 percent and smallcap index rose 0.6 percent.

The tractor sales in India have been on a slow wicket, it was down by over 10% YoY for the month of June due to a higher base, and delayed arrival of the monsoon. For the month of July too, the expectation is expected to be on similar lines - uneven distribution of rains, flooding, and a higher base of July 2021 may impact sales for July 2022.

However, we expect the situation to normalize as the season progresses. We expect volume to pick up in August and September. Supply-side issues getting addressed, inflation peaking out and economic growth picking pace augurs well for an overall recovery in the rural economy. Tractor sales provide a mirror image of the rural economy.

Brokerage house BofA Securities has maintained buy rating on the stock with a target at Rs 8,345 per share on the back strong performance with beats on all key parameters.

The company is well-placed for strong growth revival, said BofA Securities.

The buy rating premised on growth with a strong capital buffer & AQ normalisation, reported CNBC-TV18.

Bajaj Finance was quoting at Rs 7,105.00, up Rs 711.25, or 11.12 percent on the BSE.

ArcelorMittal on Thursday posted a 2 per cent decline in its net income at $3,923 million for the second quarter ended June 30, 2022.

The company had posted a net income of $4,005 million in the corresponding period last year.

In a statement, ArcelorMittal said sales were at $22.1 billion in April-June quarter of 2022, as compared to $19.3 billion in the second quarter in 2021.