Taking Stock | Market rallies for 5th day in a row; Nifty on course to retest 10,000

Domestic market benchmarks ended in the green for the fifth consecutive session on June 2, tracking positive Asian peers while the optimism around the resumption of economic activities and government's commitment to reforms to strengthen the economy underpinned market sentiment.

Prime Minister Narendra Modi spoke about 'getting growth back' at the CII Annual Session 2020. Modi reiterated that strengthening the economy was one of the top priorities alongside fighting coronavirus. Coronavirus may have slowed economy, but India will get its growth back, he said.

The market continued to trade higher despite Moody's Investors Service downgrading India's rating to 'BAA3'.

Sensex closed with a gain of 522 points, or 1.57 percent, at 33,825.53 while Nifty ended 153 points, or 1.56 percent, higher at 9,979.10.

In sync with the benchmarks, BSE Midcap and Smallcap indices closed with healthy gains of 1.20 percent and 1.83 percent, respectively.

The overall market capitalisation of BSE-listed firms rose to Rs 131.91 lakh crore on June 2 against Rs 130.2 lakh crore on June 1, making investors richer by Rs 1.7 lakh crore in a single day.

Top Nifty gainers were Bajaj Finserv, Zee Entertainment Enterprises and Bajaj Finance which rose between 8-9.5 percent.

Top Nifty losers were Coal India, Maruti Suzuki and BPCL which fell between 1-3 percent.

Ajit Mishra, VP - Research, Religare Broking said we may see some consolidation or profit-taking ahead, as there is a critical hurdle around 10,050 zone. However, the buoyancy in banking would help the index maintain a positive tone. He advised focusing on stock selection.

Barring BSE FMCG index, which fell 0.54 percent, all sectoral indices ended in the green.

With a gain of 4.57 percent, BSE Realty emerged as the top gainer, followed by BSE Bankex and Finance indices which rose 3.25 percent and 3.12 percent, respectively. BSE Consumer Durables and Utilities rose over 2 percent each.

Volume spike of over 300 percent was seen in Mindtree and Motherson Sumi. Volume spike of more than 100 percent was seen in HDFC Life, Godrej Properties and Max Financial Services.

Long build-up was seen in stocks like Vodafone Idea, Bajaj Finserv, Zee Entertainment, Bajaj Finance and Bandhan Bank.

Short build-up was seen in stocks such as HDFC Life, Coal India, United Spirits, Max Financial Services and Divi's Laboratories.

Over 480 stocks, including Lemon Tree Hotels, Sadbhav Engineering, KPIT Technologies, Quess Corp, Sobha and Raymond, hit their upper circuits on BSE.

Tata Motors share price rose nearly 8 percent after the company resumed operations at all its plant. The company in a statement said that it has resumed operations in all plants along with the Jamshedpur Plant also getting approval on May 27, 2020.

Shares of Strides Pharma Science climbed 2.5 percent after getting approval from the US health regulator for its skin ointment.

Tata Power Company share price jumped over 7 percent after the company completed the acquisition of a 51 percent stake in TP Central Odisha Distribution Ltd for Rs 178.5 crore.

Shares of Voltas gained over 3 percent as most brokerages remained positive on the stock but cut their full-year earnings estimates due to nationwide lockdown started on March 25 to control the spread of COVID-19.

NCC share price jumped 6 percent after Aditya Birla Sun Life Insurance Company bought 40,00,000 shares at Rs 25.92 per share on NSE.

Apart from initial volatility, Nifty remained strong throughout the session to close near the psychologically important 10,000 mark, following the gradual opening up of the economy and the government's commitment towards more reforms to strengthen the economy.

The index formed a long bullish candle on daily charts as closing was higher than opening levels which moved into a new swing high of 9,995 levels.

As per Nagaraj Shetti, Technical Research Analyst at HDFC Securities, Nifty is currently placed at the crucial overhead resistance of 10,000 levels. Previously, the index had reversed its trend decisively on the upside from this level in March and November 2018. Hence, Shetti believes Nifty sustaining above 10,000 mark is going to be crucial for further upside.

He said the short-term trend of Nifty continues to be positive. A sustainable move above 10,000 mark is expected to pull the market towards the next upside region of 10,500 in the next 1-2 weeks.

He added that if Nifty fails to move above 10,000 levels, it may trigger downward correction from the highs. Immediate support is placed at 9,865.