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Taking Stock | Market bounces back; Sensex, Nifty gain 3%; metal, pharma, banks lead charge

Welspun Corp, ITC and Hindustan Aeronautics were among the stocks that touched their 52-week high on the BSE

May 20, 2022 / 04:53 PM IST

The Indian benchmark made a smart recovery from the previous day’s battering, recouping the losses and ended nearly 3 percent higher supported by strong global cues and buying across the sectors.

At close, the Sensex was up 1,534.16 points, or 2.91 percent, at 54,326.39, and the Nifty was up 456.80 points, or 2.89 percent, at 16,266.20.

Asian markets opened high after China cut the five-year loan prime rate to 4.45 percent from 4.6 percent to bolster growth, amid indications that the Covid situation had begun to ease in the financial hub of Shanghai.

"The market displayed a confident yet calm rally throughout the day, supported by fortified global markets, especially the Asian market," said Vinod Nair, Head of Research at Geojit Financial Services.

A positive start for Asian peers saw Indian shares open higher and the indices extended the gains as the day progressed, finishing a tad below intraday highs. The Sensex and the Nifty touched highs of 54,396.43 and 16,283.05 during the day.

Close

For the week, BSE Sensex rose 1,532.77 points, or 2.90 percent, and the Nifty added 484.05 points, or 3.06 percent.

Investors got richer by Rs 4,92,349.47 crore, as the market capitalisation of BSE listed companies rose to Rs 2,54,11,537.52 crore on May 20 from Rs 2,49,19,188.05 crore the previous day.

"The Chinese central bank cut a key interest rate to support growth, injecting optimism into emerging markets," Nair said.

IndexPricesChangeChange%
Sensex53,161.28433.30 +0.82%
Nifty 5015,832.05132.80 +0.85%
Nifty Bank33,811.25183.80 +0.55%
Nifty 50 15,832.05 132.80 (0.85%)
Mon, Jun 27, 2022
Biggest GainerPricesChangeChange%
Coal India182.055.50 +3.12%
Biggest LoserPricesChangeChange%
Apollo Hospital3,794.50-43.90 -1.14%
Best SectorPricesChangeChange%
Nifty IT28346.00568.20 +2.05%
Worst SectorPricesChangeChange%
Nifty Pharma12221.5043.10 +0.35%

With concerns about slowdown and rate hikes across the globe, investors will continue to move with caution. Value stocks should do well during this consolidation period, he said.

Dr Reddy's Laboratories, Reliance Industries, JSW Steel, Nestle India and Tata Motors were among the top Nifty gainers, while losers included Shree Cements and UPL.

All the sectoral indices ended in the green. Nifty bank, metal, pharma, PSU bank, FMCG, auto and energy indices were up 2-4 percent.

Also Read: Nilesh Shah lists three reasons for FII selloff

Stocks and sectors

On the BSE, metal, healthcare, capital goods, and realty indices rose 3-4 percent each. Auto, bank, FMCG and Oil & Gas indices were up 2 percent each.

Broader indices, BSE midcap and smallcap, however, underperformed the benchmarks but still gained 2 percent each.

A long build-up was seen in BHEL, Sun TV and Dr Reddy's Laboratories, while a short build-up was witnessed in Container Corporation, PI Industries and Godrej Consumer Products.

Welspun Corp, ITC and Hindustan Aeronautics were among the stocks that touched their 52-week high on the BSE.

Among individual stocks, a volume spike of more than 200 percent was seen in Zydus Lifesciences, Container Corporation and Godrej Consumer Products.

Also Read: Sensex, Nifty up 2.5 percent each as China cuts key lending rates, FM foresees 8.9 percent GDP growth for FY23

Outlook for May 23

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

After witnessing a sharp decline over the past two weeks, the equity markets ended this week on a positive note. However, following global cues, the Indian equity markets witnessed large volatility.

The metal sector rebounded sharply after a steep correction in recent weeks. BSE IT index was down in an otherwise positive market this week.

FIIs continued their selling in India. Markets remained wary of global growth-inflation expectations. With the result season entering the last leg, the focus will be more on the macro data points.

Monetary policy tightening action by central banks globally amid high inflation will continue to weigh on market sentiments.

Prashanth Tapse, Vice President (Research), Mehta Equities

Led by Reliance Industries and Tata Motors, bulls came back with vengeance, primarily buoyed by a fall in the US treasury bond yields and the US dollar Index.

Another positive takeaway was the all-round buying—from FMCG, IT to metal stocks.

Interestingly, the gains came despite the overnight fall in Wall Street amid fears of inflation and waning hopes for the US and global economic recovery.

The technical picture has shifted to neutral and positive following the aggressive spike during the day, with all bullish eyes on the Nifty’s biggest hurdles at the 16,411 mark. Expect a waterfall of selling only below the 15,951 mark.

Amol Athawale, Deputy Vice President-Technical Research, Kotak Securities

The Market did a U-turn from the previous day’s slump, as bargain hunting following the recent crash and recovery in other Asian indices bolstered the sentiment at home.

China's central bank cutting the five-year loan prime rate and easing of Covid restrictions also provided a major leg-up to the market.

Technically, after a sharp price correction, the Nifty eventually took the support near 15,750 and bounced back sharply.

On the daily chart, the index formed a double bottom formation and, on the weekly charts, after a long time, it formed a long bullish candle, indicating a further uptrend.

On the weekly charts, the Nifty reclaimed 16,000 and is comfortably trading above the 10-day simple moving average (SMA). The reversal formation is likely to continue if the index succeeds to trade above 16,000 and above it, it can move up to 16,400. The upside may continue and lift the index to 16,550. However, below 16,000, the upside would be vulnerable and the index could slip to 15,800-15,700.

Disclaimer: The views and investment tips expressed by experts on Moneycontrol.com are their own and not those of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.

Disclosure: Moneycontrol is a part of the Network18 group. Network18 is controlled by Independent Media Trust, of which Reliance Industries is the sole beneficiary.
Rakesh Patil
first published: May 20, 2022 04:53 pm
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