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Taking Stock: Bulls race ahead, Sensex rallies over 200 points to reclaim 39,000

Sectorally, action was seen in energy, bankex, auto, IT, and realty stocks while profit-booking was seen in telecom, capital goods, FMCG and healthcare space.

August 26, 2020 / 05:55 PM IST

The bulls pushed the benchmark indices above their crucial resistance levels to a six -month high on August 26, a day ahead of F&O expiry. The S&P BSE Sensex rallied more than 200 points to reclaim 39,000 while the Nifty50 was back above 11,500.

The Sensex ended 230 points higher at 39,073 while the Nifty50 rallied 77 points to close at 11,549.

Positive global cues kept the momentum going on D-Street that closed in the green territory for the fourth time in a row.

“Indian benchmark indices picked up positivity towards the latter half of the trading day, after trading flat with a slight positive bias, and ended in gains,” Vinod Nair, Head of Research at Geojit Financial Services told Moneycontrol.

The move was in sync with a positive opening in the European markets banking on additional stimulus measures, he said

“Index heavyweight RIL contributed more than half of the Nifty gains while sectorally auto and the banking index contributed most,” Nair said. Auto stocks gained on expectations of government measures to help the ailing sector.

Due to lack of fresh triggers markets were expected to remain uncertain while stock-specific action would continue, he said.

Sectorally, the action was seen in energy, Bankex, auto, IT, and realty stocks while profit-booking was seen in telecom, capital goods, FMCG, and healthcare space.

On the broader markets front, the S&P BSE midcap index rose 0.38 percent while the smallcap index closed with gains of 0.69 percent.

Top Nifty gainers included IndusInd Bank, Hero MotoCorp and Tata Motors.

Top Nifty losers included Britannia Industries, UltraTech Cements, and Bharti Airtel.

Stocks & Sectors

Sectorally, the S&P BSE energy index rose 2 percent followed by Bankex that was up 1.5 percent and the auto index gained 1.5 percent.

Selling pressure was seen in the S&P BSE telecom index that fell by 2 percent, the capital goods index was down 0.4 percent and the FMCG index slipped 0.09 percent.

Volume spike of more than 100 percent was seen in stocks like RIL, Hero MotoCorp, TVS Motor Company and Adani Enterprises.

Long buildup was seen in stocks like RBL Bank, Shriram Transport and NMDC.

Short buildup was seen in stocks like ITC, UltraTech Cements and Nestle India.

Wabco India, Alkyl Amines, Hero MotoCorp and Affle India were among more than 200 stocks on the BSE hit a 52-week high.

Stocks in news

Tata Motors share price rose more than 8 percent on August 26, a day after the company said it proposed to reduce its debt to near-zero levels.

Two-wheeler manufacturers were in focus on August 26 after Finance Minister Nirmala Sitharaman hinted at a goods and services tax rate revision. Hero MotoCorp rallied over 6 percent, TVS Motor 5 percent and Bajaj Auto closed with gains of more than 2 percent.

JMC Projects share price surged more than 12 percent after the company secured new orders worth Rs 554 crore.

Affle India share price hit 5 percent upper circuit after the company won a contract for a Singapore citizens engagement project.

Dish TV India stock jumped 10 percent after its lenders sold 3.85 crore pledged promoters' shares, following which the shareholding of the promoter group firm Direct Media Distribution Ventures Pvt Ltd has come down by 2.09 percent.

Technical View

The Nifty made a small bullish candle on the daily charts

It appears to have cleared all critical resistances. The bullish momentum is likely to continue as long as the index trades above 11,400.  A close below the said level can again make the Nifty directionless with targets of 11,250.

As Nifty closed above the psychological resistance of 11,500, it can also lead to short covering on the expiry session. In that scenario, based on last 31 days price action, a near-term target of around 11,850 can be projected, Mazhar Mohammad of said.

For the time, traders should remain long for an initial target of 11,850 with a stop below 11,460 on a closing basis, he added.

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Disclosure: Reliance Industries Ltd. is the sole beneficiary of Independent Media Trust which controls Network18 Media & Investments Ltd which publishes Moneycontrol.

Kshitij Anand
Kshitij Anand is the Editor Markets at Moneycontrol.
first published: Aug 26, 2020 04:49 pm