Taking Stock: Nifty flirts with 9,000, Sensex rallies over 200 points on hopes of stimulus package

Indian markets closed in the green on April 16 after two consecutive sessions of fall, tracking positive global cues and hopes of a stimulus package from the government.

The S&P BSE Sensex rallied more than 200 points but the Nifty50 failed to close above the psychologically important 9,000-mark.

Let’s look at the final tally on D-Street: the S&P BSE Sensex rose 222 points to 30,602 while the Nifty50 closed 67 points higher at 8,992, just a shade below 9,000.

Sectorally, the action was seen in power, capital goods, oil & gas, and consumer durables while profit-taking was visible in IT, Telecom, and FMCG indices.

The broader market outperformed as the S&P BSE Midcap index rose 1.4 percent while the S&P BSE Smallcap index was up 1.7 percent.

The Indian rupee tanked 43 paise to settle at an all-time low of 76.87 (provisional) against the US dollar, amid rising concerns over coronavirus-led economic slowdown.

Market faced selling pressure at high levels above 9,000, which suggests that D-Street is looking for a strong trigger that could come in the form of a stimulus package.

Media reports said Finance minister Nirmala Sitharaman would be meet Prime Minister Narendra Modi to finalise the stimulus and support measures to cushion the economic from the impact of the coronavirus outbreak.

"Directional move is missing in the market and after the event in the form of stimulus package, the index can move in either directions," Mazhar Mohammad, Chief Strategist – Technical Research & Trading Advisory, Chartviewindia.in, told Moneycontrol.

"Traders are advised to wait for a technical breakout and initiate trading bets in the direction of such a breakout," he said.

Top Nifty gainers include Shree Cements, ICICI Bank, Hindalco Industries, Vedanta, and NTPC.

Top Nifty losers include Hero MotoCorp, Infosys, Kotak Bank, Tech Mahindra, and HCL Technologies.

Stocks & sectors

Sectorally, the S&P BSE Power index rose 2.8 percent, followed by the S&P BSE Capital Goods index that was up 2.2 percent, and the S&P BSE Oil & Gas index was up 1.9 percent.

Profit-taking was visible in the S&P BSE IT index that was down 1.7 percent, followed by the S&P BSE Telecom index that fell 1.67 percent.

A volume spike of over 100% was seen in stocks like Container Corp, Tata Chemicals, Sun TV, L&T Finance Holdings, and Balkrishna Industries.

Long Buildup was seen in stocks like Chola Finance, Torrent Pharma, Indiabulls Housing Finance, Voltas, and HDFC.

Short Buildup was seen in stocks like Bharti Infratel, Bharti Airtel, and Piramal Enterprises.

Nearly 40 stocks on the BSE hit a fresh 52-week high. These include Nestle India, Sanofi India, Divi’s Laboratories and Ruchi Soya.

Stocks in news

Biocon: The share rallied 4 percent after its biological unit received Establishment Inspection Report from the US health regulator for two manufacturing facilities.

IndusInd Bank: The share gained over 2 percent after global broking and research firm Goldman Sachs bought Rs 176-crore worth of shares in the private lender.

Larsen & Toubro: The share was up over 3 percent after the heavy engineering arm of the company won significant contracts in Q4 of FY20.

Punjab & Sind Bank: The share jumped over 12 percent after the bank said it would raise up to Rs 1,500 crore through equity and preferential issue of shares.

Hindustan Composites: The share rose 10 percent after the company resumed partial operations at its Aurangabad unit.

Wipro: The share recouped losses and closed flat a day after the company reported muted numbers for the March quarter. Most global brokerage firms reduced their target price post March quarter results.

Technical View

The Nifty formed a bullish candle on the daily charts.

The market may remain in narrow trading range of 9,200– 8,800 and appears to be awaiting for a stimulus package which shall facilitate a directional move in the index.

A close below 8,820 can trigger a fresh leg of a downswing, with the initial target placed around 8,400, whereas a breakout above 9,200 on the closing basis can strengthen the bullish sentiment

As the directional move is missing and after the event, in the form of stimulus package, the index can move in either of the directions, traders are advised to wait for a technical breakout and initiate trading bets in the direction of such a breakout, Mohammad said.

Presently, the lower area of 8,900 and 8,850 is acting as a key support for the market and the Nifty is stuck at the overhead resistance of around 9,050-9,100 levels.