Volatility is likely to continue in the near term and the immediate resistance for the Nifty stays at 9,450 levels.
It was a volatile day on D-Street. The Nifty50, which failed to hold on to the crucial 9,300 levels, bounced back after hitting an intraday low of 9,116 to end above 9,250. The S&P BSE Sensex also witnessed an intraday swing of more than 800 points.
The final tally on D-Street: the S&P BSE Sensex rose 232 points to 31,685 while the Nifty50 closed 65 points higher at 9,270 on May 6.
Sectorally, the action was seen in finance, telecom, bank, auto, and realty stocks while profit-taking was visible in FMCG, consumer durable and IT.
The broader markets also gained. The BSE midcap index rose 0.78 percent and the smallcap index went up 0.49 percent.
The Indian rupee ended 13 paise lower at 75.76 per dollar amid volatile trade in the domestic market.
The volatility is likely to continue in the near term. The index defended 9,100 levels, and on the higher side, profit booking was visible above 9,300. The immediate resistance for the index stays at 9,450.
"Markets were volatile as 9,100 levels held out as key support for the Nifty in a day of mixed gains for its constituents. Financials led the gains, in anticipation of stimulus measures, while FMCG, bluechip IT stocks, and OMCs disappointed,” Vinod Nair, Head of Research at Geojit Financial Services told Moneycontrol.
“The volatility is expected to continue as investors look out for trading cues in the form of stimulus measures by the government and global market trends.”
Top Nifty gainers included HDFC Bank, GAIL India, M&M and Bajaj Finance.
Top Nifty losers included UPL, IOC, Coal India, Bharti Infratel and ITC.
Stocks & Sectors
Sectorally, the S&P BSE Finance index rose 2.4 percent followed by the BSE telecom index that was up 2.3 percent. The BSE auto index closed with 1.9 percent gains.
Profit-taking was visible in the BSE FMCG index that fell 1.98 percent followed by the BSE consumer durables index that slipped 0.5 percent and the S&P BSE IT index was down 0.46 percent.
A volume spike of more than 100 percent was seen in stocks like TVS Motor, Equitas, HPCL, HDFC Life and NIIT Technologies.
Long buildup was seen in stocks like SBI Life, NIIT Technologies, ACC and Tata Chemicals.
Short buildup was seen in stocks like ITC, Bank of Baroda and HUL.
More than 120 stocks hit a 52-week low on the BSE. These included PVR, Voltas, Birla Corp, Godrej Industries and SBI.
Stocks in news
Bharti Airtel: The share price jumped over 3 percent after the Delhi High Court allowed a refund of Rs 923 crore on account of overpaying GST between July and September of 2017.
NIIT Tech: The stock surged 20 percent after the company reported a 11.4 percent jump in consolidated net profit to Rs 113.6 crore for the March 2020 quarter. It declared a third interim dividend of Rs 11 per share.
Astec Lifesciences: The share zoomed 20 percent after the company's net profit jumped 145.13 percent to Rs 31.18 crore in the March quarter against Rs 12.72 crore during the previous quarter.
ITC: The stock tumbled 5 percent after a media report said the Centre was looking to raise Rs 22,000 crore by selling its stake in ITC (7.94 percent), which it holds through the Specified Undertaking of the Unit Trust of India, in a bulk deal on the exchanges.
Bharat Dynamics: The stock rose more than 4 percent after the company received a Rs 293-crore order from the Indian Air Force.
Persistent Systems: The share price jumped 7 percent after the company reported a decrease of 0.8% in net profit at Rs 83.82 crore for the March quarter. For the financial year 2019-20, the company reported revenues of Rs 3,565.80 crore, up 5.9%.
JB Chemicals: The share was up moe than 7 percent after media reports said that global buyout funds KKR, Carlyle, Apax Partners and PAG were in the race to acquire the domestic pharmaceuticals firm.
The Nifty formed a spinning top, an indecisive formation, on the daily charts.
In the next trading session if it manages to defend 9,116 and sustains above it, the index will remain sideways with a positive bias.
The formation of bearish patterns like bearish island reversal (on May 4) and the false upside breakout of the rising wedge (converging trend line breakout) could signal a weak outlook. The downside pattern target for the bearish island reversal is at 8910, say experts.
The short-term is slightly positive with range-bound action. There is a possibility of a minor upside bounce in the next one or two sessions, maximum up to 9,450-9,550 levels.Traders still short on this market are advised to square off their short positions if the index sustains above 9,350 for more than 30 minutes, experts say.