Closing Bell: Nifty ends above 16,200, Sensex gains 1,344 pts; all sectors end in the green

Follow our LIVE blog for the latest updates on listing day of LIC

Prashanth Tapse, Vice President (Research), Mehta Equities:

Bulls roared back on Dalal Street as Nifty ended above 16250. Metal pack were the star performers shine as key benchmark indices rose sharply amid positive Asian and European stock market cues in the backdrop of outweighed inflation and stagflation fears.  

Value buying backed by short covering came to bulls’ rescue. The biggest positive catalyst was China -- the biggest consumer of industrial products -- eased Covid-19 related restrictions. The optimism was so powerful that bulls shrugged off LIC’s poor listing performance (8% down at Rs. 873 from its issue price of Rs. 949). The next move could see Nifty bulls probably zip to its 200 - DMA of 17253. For the index, support is seen at 16000 and below the level, Nifty could swiftly move to 15671 mark.

Gaurav Ratnaparkhi, Head of Technical Research, Sharekhan by BNP Paribas:

The Nifty was trading in a sideways manner for the last couple of sessions. It had formed a Doji pattern on the daily chart on May 16, which was a sign of indecision in the minds of the market participants. 

In terms of the price patterns, the Nifty had formed a triangular pattern on the hourly chart. On May 17, the index broke out from this indecisive phase on the upside. 

On the way up, the index crossed the 16000 mark as well as the key hourly moving averages, which reinforced the bulls further. All these observations suggest that the Nifty has turned its short term trend positive. 

Going ahead, 16480-16500 will be the initial target area from short term perspective. On the flip side, 16100-16000 will now act as a near term support zone.

Shrikant Chouhan, Head of Equity Research (Retail), Kotak Securities:

Markets witnessed a sharp relief rally as the recent slump had put key indices in an oversold territory. Traders covered their short positions in several beaten-down stocks that propelled key benchmarks today.  However, the rally could be short-lived as the unabated FII selling coupled with concerns of further rate hikes to tame inflation may fuel volatility. 

On daily charts, Nifty has formed a long bullish candle which is broadly positive in the short term. 

For the trend following traders, 16150 would be the trend deciding level, above which the positive momentum is likely to continue till 16380-16450. On the flip side, a quick intra-day correction is possible if the index slips below 16150. Below the same, the index could retest the level of 16080-16050.

Vinod Nair, Head of Research at Geojit Financial Services.

After a long gap, the market has witnessed a strong resilience supported by heavyweights and broader markets. The market was trading at oversold territory and was inspired by optimism in the Asian markets led by Chinese technology stocks, in hopes of easing regulatory crackdown and declining covid cases.
 
The much-watched LIC’s IPO showed a subdued listing. However, we believe that LIC is a decent investment opportunity in the short to medium-term; considering its deep discount valuation, strong market presence, improvement in future profitability due to the changes in surplus distribution norms and strong sector growth outlook.

Jateen Trivedi, VP Research Analyst at LKP Securities:

Rupee opened weak near 77.75 on back of dollar higher prices on Monday when Currency markets were closed. But soon started to gain momentum as dollar prices corrected from $105 levels to $103.75 shading more than -1.25% from the peak registered over the long weekend. 

Rupee can be seen with positive moves as buyers are seen near levels of 77.75. Resistance for the rupee is at 77.15-77.20 which can be tested in coming sessions. Crude prices can halt rupee gains if prices of WTI crude start moving above $115.

S Ranganathan, Head of Research at LKP securities:

A ferocious up-move from the Metal Index lifted Reliance together with other sectoral indices in afternoon trade today leaving bears gasping and covering short positions and looking out for reasons for the rally. 

On a day when WPI for April crossed 15%, the 2.7% rise in benchmark indices coupled with the breadth of the rally surprised many on the street despite the move coming after a relentless fall.

Market Close: Benchmark indices ended higher for the second consecutive session with Nifty closing above 16,250.

At close, the Sensex was up 1,344.63 points or 2.54% at 54,318.47, and the Nifty was up 417 points or 2.63% at 16,259.30. About 2575 shares have advanced, 693 shares declined, and 112 shares are unchanged. 

Hindalco Industries, Tata Steel, Coal India, JSW Steel and ONGC were among the top Nifty gainers.

All the sectoral indices ended higher with metal index up over 7 percent and all other sectoral indices up between 1-3 percent.

BSE midcap and smallcap indices gained more than 2 percent each.

Suman Chowdhury, Chief Analytical Officer, Acuité Ratings & Research:

The upward trajectory continues unabated for not only retail inflation but also for whole sale inflation which has climbed up further to 15.08% YoY in Apr-22 from 14.55% in Mar-22 with strong sequential pressures of 2.1% as compared to 2.7% seen in the previous month. Clearly, the data reinforces the presence of sustained inflationary pressures in the manufacturing and the services sector.
 
Elevated crude oil prices with an average of over USD 100 pb since the intensification of the Russia-Ukraine conflict from end Feb-22 along with hike in other key commodity prices is visible in the sequential rise in both primary commodities and fuel and power index of 2.7% and 2.8% MoM respectively for Apr-22. The inflation in manufactured products have risen sequentially to almost 1.7% and also slightly increased on a YoY basis to 10.8% from 10.7% in Mar-22, reflecting the increasing pressures of pass through from input cost surge. The pressures on the wholesale side is currently being driven by food commodities where the sequential growth in Apr-22 has been the highest at 3.3%.
 
Further, WPI core inflation (non-food manufacturing inflation) is estimated to have increased further to 11.1% YoY in Apr-22 from 10.9% YoY in Mar-22, with a lower sequential uptick of 1.5% vs 2.2% in the previous month. While the incremental pass through pressures have slightly eased due to the weaker demand sentiments, Acuite expects gradual through transmission of input costs by the manufacturing sector given the persistent supply side bottlenecks and high commodity prices.

Vivek Gupta, MD at GEPL Capital

India's biggest-ever IPO, LIC finally listed its shares at a discounted rate of over 8% i.e., Rs 77 on the BSE and the NSE. This discount reduces the break-even prices for employees and retailers which stand at Rs 904 and policyholders at Rs 889. 

Here’s my advice to policyholders. Hold on to your shares from a medium- to long-term perspective. In fact, in case you are planning to buy today, you should accumulate by taking volatility as an opportunity.

LIC is trading at a discounted rate and you might be able to accumulate more as the Mcap/EV ratio of 1.1x becomes more attractive than what it was in the primary market.

We must be aware that the business of insurance in itself is long-term in nature and therefore I recommend staying vested.

Vinod Nair, Head of Research at Geojit Financial Services:

The subdued listing of LIC is in-line with expectations in context to the drop in market dynamics from the opening of the IPO to the listing date. The listing price has fallen in tandem with the fall of insurance sector valuations, maintaining the discount of about 70% to the industry’s average. 

Positively, the stock was brought at the dip. We believe that LIC is a decent investment opportunity in the short to medium-term considering its strong market presence, improvement in future profitability due to the changes in surplus distribution norms and strong sector growth outlook. 

LIC can perform well when we have a bounce in the market and positive performance in the insurance sector.

All stocks on BSE Sensex trade in the green: