What a month! Sensex and Nifty50 rallied more than 14 percent each in April during the lockdown boosting both the indices above their crucial resistance levels. The S&P BSE Sensex reclaimed 33,000 while the Nifty50 is back above 9,800.
The broader markets performed largely in line with benchmark indices. The S&P BSE Smallcap index was up 15.54 percent while the S&P BSE Midcap index gained 13.66 percent during the same period.
Riding the momentum, two stocks in BSE500 index more than doubled in April - Jain Irrigation Systems, and Reliance Infrastructure.
And, as many as 19 stocks rose more than 50 percent in the same period. These include Aurobindo Pharma, Ashoka Buildcon, Laurus Labs, CESC, Reliance Power, Reliance Capital.
Investors’ wealth rose by nearly Rs 16 lakh cr in a month. The average market capitalisation of the BSE-listed companies grew from Rs 113.48 lakh cr as on March 31 to Rs 129.41 lakh cr recorded on April 30.
Selling by foreign institutional investors also slowed in April which supported the sentiment. FIIs were net sellers for a little over Rs 5000 cr in the cash segment of Indian equity markets compared to over Rs 65000 cr selloff in March.
More than 50 percent of the BSE500 stocks outperformed the S&P BSE Sensex in April, and as many as 37 stocks hit their fresh 52-week high in the same period that includes names like Asian Paints, HUL, AU Small Finance Bank, Dabur India, Sun Pharma, Alembic Pharma, and Laurus Labs, etc. among others.
Although new cases spiked from 146 as on March 31 to 1823 as on April 30, according to India COVID-19 tracker, but D-Street took comfort from the various stimulus packages announced by central bankers across the globe including India, say experts.
“Indian markets cheered on hopes of another possible fiscal stimulus from the Indian government. Emerging markets like Thailand, Malaysia, and developed markets like the US have supplemented their economies with stimulus packages in the range of 10-15 percent of their GDP which has triggered markets and brought about the strong retracement from the lows,” Umesh Mehta, Head of Research, Samco Securities told Moneycontrol.
“Hence, the current market rally in India is nothing more than a globally orchestrated rally. Going head markets would largely take cues from any updates on the lifting of the extended lockdown, quantum and coverage of the possible stimulus package from our government as well as domestic mutual fund’s behavior,” he said.
Technical View:
The Nifty50 broke the four series losing streak as it gained 14 percent in the April series. This is the highest series to series gain since May 2009.
The Nifty50 continued to form higher highs – higher lows for the fourth consecutive week and formed a bullish candle on both weekly and monthly scale.
“Now, the 50% retracement level of the entire fall from 12430 to 7511 levels, which is placed at 9970, would be immediate hurdle for the Nifty and a sustainable move above the same may pull the index towards 10200 - 10300 levels,” Chandan Taparia, Derivative & Technical Analyst, Motilal Oswal Financial Services Ltd told Moneycontrol.
“On the flipside, downside support is shifting higher to 9700 and then 9400 levels. Traders are advised to trade with positive bias till the time Nifty holds above 9700 zone,” he said.
Since it is the beginning of the May monthly series, open interest (OI) activity is scattered at various strikes. The maximum Call OI is placed at 9500, and then towards 10,000 strikes while maximum Put OI is placed at 9,000, and then towards 8,500 strikes.
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