Closing Bell: Nifty ends around 16,000, Sensex gains 616 pts; auto, FMCG shine

Markets showed resilience and gained over a percent amid mixed cues. After the initial uptick, the benchmark gradually inched higher as the session progressed and settled around the day’s high.

Healthy buying in auto, FMCG, financials and realty stocks boosted sentiment. Among the benchmark indices, the Nifty index settled at 15989.80 levels; up by 1.13%. The broader indices also ended in the range of 0.5-2%.

Global indications are still mixed so it’s too early to celebrate the recent rebound. We recommend continuing with a cautious approach and sticking with the themes which are offering comfort even during the downtick. Nifty has the potential to inch towards 16,200 however the upcoming earnings season would play a critical role in the sustainability of the rebound

Nifty rose on July 06 despite not so encouraging Asian cues and retested 16000 levels. Nifty opened flat and rose gradually through the day to close almost at the intraday high. At close Nifty was up 1.13% or 178.9 points at 15989.8. In the process, Indian markets were the best performer in the Asian region.

Volumes on the NSE were a little higher than the recent average. Among sectors, Realty, Consumer Durables, Auto and FMCG indices gained the most while Metals lost the most. Advance decline ratio was comfortably above 1:1. BSE Midcap index outperformed the Nifty.

Asian stocks mostly slipped on Wednesday as investors' fears deepened that the continent is leading the world into recession. The surge in COVID-19 infections in China also hurt market sentiment as it reignited worries about potential lockdowns. European stock markets traded higher Wednesday, rebounding strongly with investors seeking bargains after the previous session’s slump on increasing recession fears. An end to strike by Norwegian oil and gas workers eased worries of energy supply crunch.

A move above 16026 could result in more upsides while 15785 could be near term supports.

The Nifty bulls came back strong from the lower levels and ended the index on a high note. The lower-end support stands at the 15,800 level and as long as this support is held the index remains in a buy mode.

The Bank Nifty covered the entire previous day's losses and closed near the day's high indicating sharp short-covering throughout the day. The index is comparatively stronger than the Nifty index and continues to be in buy mode with strong support at the 33800 level. The index is likely to test the upside level of 35,000-35,500 which coincides with its 200DMA.

Softening crude oil prices, FIIs repositioning to net buyers and strong business data from lenders tempered optimism in domestic equities.

Crude prices fell over recessionary fears, however, the fall has boosted the appetite for consumption, chemicals, logistics and OMCs as it will reduce the cost burden of these sectors.

Indian stock indices outperformed other Asian peers to end on a firm note and, despite the volatile sentiment, Nifty managed to edge past the psychological 16k mark on renewed buying. It was more of a relief rally as markets have been falling in the last few sessions due to worries of global recession and falling crude oil prices.

Technically, the Nifty held the 20-day SMA (Simple Moving Average) level and bounced back sharply. It has also formed a long bullish candle on daily charts which is broadly positive.

We are of the view that the intraday support has shifted to 15900 from 15750. Above 15900, the index could move up to 16100-16200.

On the flip side, below 15900, any uptrend would be vulnerable. Quick intraday correction is not ruled out if the index trades below 15900. Below the same, the index could slip till 15800.

Indian rupee ended marginally higher at 79.30 per dollar against Tuesday's close of 79.37.

Benchmark indices ended on positive note with Nifty closing near 16,000 led by the auto, FMCG and financial stocks.

At close, the Sensex was up 616.62 points or 1.16% at 53,750.97, and the Nifty was up 178.90 points or 1.13% at 15,989.80. About 1779 shares have advanced, 1436 shares declined, and 131 shares are unchanged.

Britannia Industries, Bajaj Finance, Bajaj Finserv, HUL and Eicher Motors were among the top Nifty gainers. ONGC, Power Grid Corp, NTPC, HDFC Life and Hindalco Industries were among the losers on the index.

On the sectoral front, the Auto, FMCG, Realty, IT and Bank indices gained 1-2, while selling was seen in the Metal stocks.

The BSE midcap index rose 1.7 percent, and smallcap index added 0.94 percent.

Benchmark indices up 1% each: 5 factors that are supporting the market

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