The headline indices shrugged off mixed sentiments from the global markets as talks of slower interest rate hikes by the Reserve Bank of India gained momentum.
At close, the 30-share BSE Sensex rose 491 points or 0.85 percent to reach 58,411 while the Nifty moved higher by 126 points or 0.73 percent to close at 17,312.
Two members of the monetary policy committee (MPC) of the Reserve Bank of India called for slower rate hikes and a pause at 6 percent. These statements from the MPC members came on Friday after market hours, and their positive impact on the market was felt today.
“Domestic market started weak in-line with a volatile global market, however, due to buying on dips strategy, the domestic market is recovering well supported by a good start to Q2 earnings season by IT & Banks”, said Vinod Nair, Head of Research, Geojit Financial Services.
Broadly, even though the Q2 preview analysis forecast a muted outlook, it is fairly factored-in considering the consolidation of the last one month.
The sentiments were also aided by a strong opening to European markets later in the afternoon while healthy results declared by the IT companies so far have enthused further confidence about their performance in the coming quarters.
“While outlook for Q3 results has been enhanced due to moderation in operation cost, forecasting a QoQ improvement in profitability and reducing risk of earnings downgrade”, added Nair.
Except metals and realty, all sectoral indices ended in the green. The rally was led by the banking and financials. The Nifty PSU Bank index roared today and was up 3.47 percent while the Private Banks and Financials were up more than one percent each. Nifty Auto and Oil & Gas indices were up close to 0.7 percent each.
The Nifty Metals index was the top loser as it slid close to 1 percent while the Realty index was down 0.4 percent.
SBI, NTPC, Bajaj Finserv, ICICI Bank and Axis Bank were the top gainers of the day on the Nifty, with gains ranging from 1.7 to 3.1 percent.
Among the top losers were Hindalco, Larsen & Toubro, JSW Steel, HCL Tech and Wipro and they lost between 0.6 to 2.2 percent from their previous day’s close.
Stocks & sectors
On the BSE too, the sentiment was by and large positive with BSE Utilities and Power edging higher by 1.85 percent each while the BSE Banks and financials indices were up more than one percent each.
BSE Metal index was the top loser and was down 0.84 percent while BSE Realty lost 0.5 percent. BSE Telecom, Industrials and Healthcare were also down marginally between 2 to 20 basis points.
The broader indices were largely positive with BSE Midcap moving up by 0.26 percent and BSE Smallcap gained 0.09 percent today.
The India VIX, which indicates the degree of volatility traders expect over the next 30 days, moved up by 0.87 percent from 18.26 to 18.42.
A long build-up was seen in the stocks of Canara Bank, Bank of Baroda and City Union Bank while a short build-up could be seen in Oberoi Realty, Navin Fluorine and Vedanta Ltd.
Among specific stocks, Pidilite Industries, Syngene and PVR witnessed a volume spike of more than 300 percent while the volumes for ACC were higher by just under 300 percent.
More than 110 stocks created new 52 week highs on the BSE which included City Union Bank, Data Patterns, Federal Bank, IDFC and Sun Pharma.
Outlook for October 18
Shrikant Chouhan, Head of Equity Research (Retail), Kotak Securities Ltd
Trading session was marked with intra-day volatility, but gains in European markets helped strengthen the relief rally in local equities leading to gains in banking and power stocks. Traders are closely following the global markets trend and are taking a cautious route in order to avoid getting caught off guard in case of any fresh turbulence on the global front.
On daily and intraday charts, the market has formed a higher bottom and bullish candle, which is broadly positive. For short-term traders, 17150 would act as a key support zone. Above the same, the index could move up to 17400-17500. Below 17150, any uptrend would be vulnerable.
Prashanth Tapse - Research Analyst, Senior VP (Research), Mehta Equities Ltd
Rally continued for the second straight day as investors shrugged off weak global cues in the backdrop of a stronger-than-expected US inflation report. Technically speaking, Nifty’s immediate hurdles are seen at 17429 and then at 17589 mark. Nifty will be out of the woods only above the 17589 mark. Bears are likely to come back to life only below the 17000 mark.
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