What happened with Market Today

Equity benchmarks Index closed at the record to above 60000 mark as investors rode a global rally fuelled by optimism about the economic recovery outlook. Sensex closed above the 60,000 mark for the first time aided by gains in realty, information technology, and telecom stocks, and logged gains for the fifth consecutive week. However, there was profit booking in the market after Sensex crossed above 60300 psychological levels.

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The Sensex rose 163 points 0.3% to 60,048, a record close while Sensex rose to a record 60,333 in intraday trade. Nifty advanced by a similar magnitude to 17,853, a record close, up 30 points or 0.2% while Nifty rose to a record 17,947.65 in intraday trade. HDFC Bank Ltd. contributed the most to the index gain, increasing 2.0%. Asian Paints Ltd. had the largest increase, rising 4%. On the other hand, Tata Steel, SBI, Axis Bank, ITC, NTPC, and Bajaj Finance were among the laggards. Metal, Cement, and Pharma stocks witnessed profit booking.

It took a little over 31 years for the Sensex to traverse from 1,000 points to the historic 60,000 level. The benchmark index was at 1,000 points back on July 25, 1990, and took nearly 25 years before it touched the 30,000 level on March 4, 2015. The Sensex has climbed from the 30,000 level to 60,000 in a little over six years, reflecting the overall bullishness in the market.

There was relentless buying in the market on account of strong retail participation, both local and foreign fund buying interest. On the economic front, markets have enjoyed whirlwind growth despite the outbreak of the coronavirus pandemic, more than doubling in value since an April 2020 low. Solid economic recovery and sustained growth in the next couple of years are keeping the bulls enthused. India’s growth potential, as well as the way India is emerging as a world leader during the COVID period in addition to worldwide monetary expansion and relaxed fiscal policies adopted by world powers. Global markets, the US Federal Reserve’s comment that it may start tapering as soon as November failed to perturb the benchmark indices, suggesting a strong bullish undercurrent. Further, receding concerns on the Evengrande crisis also supported the sentiment, However, global markets witnessed a mixed bag today.

The broader indices underperformed their larger peers on account of profit booking. However, Nifty IT Index witnessed a smart rally after Nasdaq listed Accenture reported strong initial guidance on FY22 revenue. Nifty IT Index surged by 0.7% to close to a record high of 37103. BSE Telecom index was the biggest gainer today and surged by 3%. The nifty Metal index slipped over 2%, Nifty Realty Index gained 1.5%, Nifty FMCG Index shed 1%, Nifty Auto Index gained 0.5%, Nifty Pharma Index slipped half percent. However, the Nifty mid-cap and small Index managed to end in positive territory but fell over 1% from the intra-day high. India Vix gained 2% to close at 16.92.

Telecom stocks witnessed a smart rally. Indus Tower climbed up 14% to close at Rs318 amid a hefty volume of 5.8cr shares traded on NSE. Bharti gained 2% to close at Rs740. The company added a net of 19 lakh mobile users during the month of July. Vodafone Idea gained 9% to close at Rs11.5.

The northbound journey continued on tech stocks ahead of good Q2 results. Infosys gained over 1% to close to a record high of Rs1764. LTI gained 3% to close to an all-time high of Rs6231. HCL Tech and MindTree gained 2% and 1% respectively. Realty stocks like Oberoi Realty climbed up 10% to close at Rs932. Both Phoenix Mills and DLF gained 2% each.

FMCG stocks witnessed profit booking. Hindustan Unilever, Colgate, Marico, and Mcdowell declined 1% each. Metal stocks declined on account of soft demand in the global market. Tata Steel slipped 4% to close at Rs1272. Vedanta, JSW Steel, SAIL, and Jindal Steel slipped 2-4%.

Auto stocks witnessed fresh buying after the news that the central government issued a gazette notification for the Rs 25,938-crore production-linked incentive (PLI) scheme for the automobile sector. M&M gained 3% to close at Rs779. Maruti and Eicher Motor gained 2% and 3% respectively. Banking major HDFC Bank is the only major gainer among the Banking stocks. It has gained 2% to close at Rs1601. However, Axis Bank, SBI, and IndusInd Bank declined 1-2% on account of profit booking.

Technical Outlook:

The nifty index opened the gap up and soared to its new all-time high level of 17947, just a few points away from the landmark 18000 marks. Some sought of profit booking was seen at higher zones which ended the market slightly below its opening levels. It formed a Bearish candle on the daily scale but a Bullish candle on the weekly scale and continues to form higher highs – higher lows from the last eight weeks. Now it has to continue to hold above 17777 zones, for an up move towards 18000 zones whereas support is placed at 17700 and 17500 zones.

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