After two straight sessions of fall, Indian markets witnessed a breakout on May 27 as the bulls pushed the S&P BSE Sensex by over 1,000 points to close above 31,000 while the Nifty reclaimed the vital 9,300 level.
Easing of restrictions and the gradual resumption of business activity in India and across the world raised investors’ hopes of the economy getting back on track, say experts.
Positive global cues in terms of fresh stimulus hopes from EU as well as Japan lifted sentiment while renewed US-China tensions over Hong Kong tempered optimism about a global economic recovery capped the upside, a Reuters report said.
Clocking their best day of the month, the Sensex ended 995 points higher at 31,605 and the Nifty50 rose 285 points to close at 9,314.
“The benchmark indices staged an intraday rally in sync with global cues, as some pockets of value buying emerged. Despite a rise in the number of infections, markets expect a slow return to normalcy when lockdown 4.0 ends this week,” Vinod Nair, Head of Research at Geojit Financial Services told Moneycontrol.
All sectoral indices were in the green and institutional buying in banking stocks helped the bank index gain more than 7 percent, say experts. The volatility is expected to continue ahead of F&O expiry on May 28.
Sectorally, action was seen in banks, finance, IT, metals, capital goods, and energy stocks while profit-taking was seen in healthcare stocks.
Most banking stocks post biggest single-day gains in nearly two months. The Nifty Bank advanced 1,270 points to 18,711, to record its best trading day since April 7.
The broader markets, however, underperformed the benchmark indices. The S&P BSE Midcap index rose 0.54 percent while the S&P BSE Small-cap index rose 0.27 percent.
Top Nifty gainers included HDFC Bank, Grasim Industries, Wipro, ICICI Bank, and Axis Bank.
Top Nifty losers included Titan Company, Shree Cements, UltraTech Cements, and Sun Pharma.
Stocks & Sectors
Secorally, the action was seen in the S&P BSE Bankex, which rose 7.3 percent, followed by the S&P BSE Finance index that gained 5.6 percent and the S&P BSE IT index was up 3 percent. Marginal selling pressure was seen in healthcare stocks.
Volume spike of more than 100 percent was seen in stocks like Hindalco Industries, IndusInd Bank, Chola Finance, Godrej Properties and Torrent Pharma.
Long Buildup was seen in stocks like HCL Tech, Hindalco, L&T, Wipro and Coal India.
Short Buildup was seen in stocks like SBI Life, Torrent Pharma, Tata Power, and Ambuja Cements.
Bajaj Finserv, Bajaj Finance, ABB India, AU Small Finance Bank and PFC were among more than 100 companies to hit a fresh 52-week high.
Stocks in news
Sun Pharma | The stock shed almost 2 percent after the company reported a consolidated profit of Rs 399.8 crore for the quarter ended March 2020.
Dabur India | The share was down a percent after the company reported a 14.24 percent YoY drop in consolidated net profit at Rs 319.24 crore for the March quarter.
Kotak Mahindra Bank | The share price jumped over 5 percent after the bank announced that it would launch qualified institutional placement (QIP) offering to raise up to Rs 7,500 crore.
Axis Bank | The share surged over 13 percent after a report said that global private equity (PE) firm Carlyle Group may invest around $1 billion in Axis Bank.
Adani Ports | The share jumped over 3 percent after the company raised Rs 700 crore by allotment of 7,000 rated, listed, secured, redeemable, non-convertible debentures of face value of Rs 10 lakh each on a private placement basis.
The Nifty formed a bullish candle on the daily charts after two bearish candles.
Markets have been consolidating in the past few trading sessions, hence an upside bounce was expected.
Trend support for Nifty50 is seen at 8,800, say epxerts
On the higher side, the initial target is seen at 9500 above which further upside up to 10,000 remains possible, Sahaj Agrawal, Head of Research- Derivatives at Kotak Securities, said.
Open interest concentration is seen at 9,000 put and 10,000 call for the June series.