Closing Bell: Nifty above 19,550, Sensex gains 170 pts; realty, pharma rally

Taking Stock: Rally continues for third day; Sensex gains 152 points, Nifty above 19,550

Among sectors, banks were down marginally, while other sectors ended in the green with healthcare and realty added 1 percent each.... Read More

Markets held on to gains for the 3rd straight day but strong follow-through buying was however missing albeit lack of positive Asian cues. The positive takeaway was that the benchmark Nifty sticked to gains as Nifty Mid-cap and Small-cap indices continue to scale fresh all-time-highs. The risk mood has improved after Friday’s softer than expected US August payrolls report which suggests that September rate hike is off the table.

The Bank Nifty index is currently consolidating within a defined range, with support at 44,500 and resistance at 44,650. Despite the consolidation, a bullish undertone is observed, and traders are encouraged to consider buying on dips, with strong support around 44,300-44,200. A breakout above 44700 could lead to further upside moves, especially towards the 45,000 level where significant open interest is seen on call options.

Nifty steadily advanced on Sept 05 to end higher for the third consecutive session. At close, Nifty was up 0.24% or 46.1 points at 19574.9. Volumes on the NSE were high and near recent average. Broad market indices rose more than the Nifty even as the advance decline ratio closed up at 1.31:1.

Global equities mostly fell on Tuesday as higher Treasury yields weighed on growth stocks, while a slow pace of expansion in services activity in China (8 month low) stoked worries over demand in the world's second largest economy.

India's services sector activity eased in August but growth rates for new orders remain elevated, as services firms indicated the sharpest upturn in new export business which acted as a catalyst for firms to expand their workforces as well as output, a monthly survey said on Tuesday. Despite falling from 62.3 in July to 60.1 in August, the seasonally adjusted S&P Global India Services PMI Business Activity Index indicated one of the strongest increases in output seen since mid-2010. For the 25th straight month, the headline figure was above the neutral 50 threshold. The S&P Global India Composite PMI Output Index -- which measures combined services and manufacturing output -- fell from 61.9 in July to 60.9 in August.

Nifty remained in a narrow 62 point range through the day on Sept 05 but formed a higher low compared to the previous day. Nifty could now stay in the 19645-19452 range for the near term.

While markets extended gains for the third straight session, the mood was more or less range-bound with a positive bias as US markets were shut on Monday and investors preferred to take selective bets. One needs to be watchful about the sharp volatility in rupee, which could impact FII flows going ahead.

Technically, the Nifty is comfortably trading above the 50 and 20 day SMA (Simple Moving Average) and on intraday charts it has been forming a higher bottom formation, which is largely positive.

The 19500 level would be the sacrosanct support zone for Nifty and above the same, the index could move up till 19620-19650. On the flip side, below 19500 bulls may prefer to exit from long positions and could slip till 19450-19420.

The Nifty opened the gap up today and consolidated in a narrow range for the most part of the day. It closed with gains for the third consecutive day. Because of the sideways consolidation, the hourly momentum indicator has slipped in the negative indicating a loss of momentum. Also considering the sharp run up a consolidation is likely. Overall, the trend is positive, and dips are being bought into it, which is a bullish sign.

We expect the broader market participation to continue to outperform and sector rotation is helping Nifty to stay elevated. On the upside we expect the Nifty to target levels of 19650. In terms of levels, 19490 - 19470 shall act as a crucial support and 19650 – 19700 shall act as an immediate hurdle.

Bank Nifty has witnessed a day of consolidation. It consolidated within a narrow range of 250 point range. Overall, we believe that this consolidation has come after a sharp run up which is likely to break out on the upside over the next few trading sessions. Momentum indicator has a positive crossover which is a buy signal. Thus, we can expect trending moves on the upside. On the upside we expect targets of 44900 – 45000 from short-term perspective.

Strong domestic factors are providing crucial support for Indian equities, allowing them to maintain their strength despite attempts by weak global peers to disrupt the mood. India's service PMI remains robust at 60.2, indicating sustained demand even in the face of inflationary pressures. Notably, small and mid-cap stocks have been standout performers, with both indices reaching all-time highs. Conversely, the weak Chinese service PMI has cast a shadow on hopes of an economic rebound in China, impacting global market sentiments.

Extending its positive momentum, the Indian bourses started the day on a steady note at 19,540. The first half of the trading session was dominated by the bulls but in the mid-session, banking counters dragged the Index lower; however, it was the Pharma and Metal stocks which came to the rescue and helped the Index to end the day at 19,574.90 with gains of 46.10 points.

Among the sectors, Media and Realty were the outperformers while Mid and Smallcap indices extended their streak of outperformance.

Once again, Nifty50 has made a DOJI candlestick pattern at its stiff resistance level of 19,580. A strong close above the mentioned level will push the Index higher to 19,710 while the downside is protected at 19,450.

The Nifty Midcap index crosses the psychological 40,000 mark, gaining nearly 35% in the last six months, while the smallcap index soars above the 12,000 mark to capture around 40% gain since March 2023.

Despite this humongous gain in prices in such a short span of time, we are still more optimistic about both indexes as growing risk appetency will continue to buoy both segments.

Following the improving economic health and domestic developments, investors turned to midcap and smallcap stocks as they are often more closely tied to economic growth than large-cap stocks and offer lucrative returns. Apart from that, improving liquidity in these stocks further fuels investor's confidence to invest more in midcap and smallcap sectors.

The Indian rupee declined to its lowest level in a month on concerns over higher crude oil prices and weaker regional currencies. The dollar rose against all Asian currencies after disappointing economic data from China and Europe bolstered a view that the US economy to outperform its peers. The haven dollar also benefited from the global risk-off tone on the expectation of hawkish Federal reserves.

In the near term, spot USDINR turned bullish after today’s price action. The pair has resistance at 83.16 and support at 82.60.

Indian rupee ended 29 paise lower at 83.03 per dollar versus previous close of 82.74.

: Benchmark indices ended higher for the third consecutive session on September 5 with Nifty above 19,550.

At close, the Sensex was up 152.12 points or 0.23 percent at 65,780.26, and the Nifty was up 46.10 points or 0.24 percent at 19,574.90. About 2052 shares advanced, 1501 shares declined, and 140 shares unchanged.

Top gainers on the Nifty were Apollo Hospitals, Coal India, Sun Pharma, BPCL and Bajaj Auto, while losers included UltraTech Cement, SBI Life Insurance, Dr Reddy's Laboratories, Maruti Suzuki and Eicher Motors.

Among sectors, banks were down marginally, while other sectors ended in the green with healthcare and realty added 1 percent each.

The BSE midcap index rose 1 percent and smallcap index gained 0.6 percent.

The board of directors of Jupiter Wagons at its meeting held on September 5, 2023 has approved raising of funds, aggregating up to Rs 700 crores through Qualified Institutions Placement, through public and/or private offerings of equity shares and/or any other convertible securities, in one or more tranches.