Sensex regains 39,000 mark as indices end near day’s high; Bank stocks surge; Nifty Pharma gains 2%

Domestic benchmark indices traded between a tight range for the majority of the trading session before swinging higher in the closing hours of trade. S&P BSE Sensex was up 287 points sitting above the 39,000 mark while the 50-stock Nifty closed comfortably with 11,524 points. Volatility slipped further to sit below the 21 levels. Bank stocks surged, helping the indices close higher. Midcap and small cap stocks continued to rally, beating the benchmarks yet again on Tuesday. With the retail inflation coming in at 6.69% yesterday the economic data was also favourable.

Midcap, small cap rally continues: Once again the midcap and small cap indices rallied, beating the gains registered by benchmark indices. S&P BSE Midcap was up 0.85% while the Small cap index gained 1.44%. Nifty smallcap 100 and Midcap 100 gained over 1%, each on Tuesday. “Market Breadth improved for the second consecutive day as several Midcap stocks across diverse sectors posted handsome gains. The Small-Cap Index rose today on the back of a stellar 5% gain yesterday sending out a clear message that Investors are looking at a more broad market rally after having witnessed a polarised market for a considerable length of time,” said S Ranganathan, Head of Research at LKP Securities.

Top gainers: IndusInd Bank, Bharti Airtel, and Axis Bank were the top gainers on Sensex, while Godrej Agrovet and JSW Energy were the top BSE Midcap gainers. Mphasis and Cholamandalam Financial Holdings followed. On the BSE Smallcap index, IDFC, Quick Heal, and Aegis Logistics were the top gainers, surging over 10% each.

Top drags: Titan, which was among the top gainers during the initial hours of trade, ended the day’s trading session as one of the worst performers. Maruti Suzuki India and ITC were the other top drags. Among BSE Midcap constituents, Adani Enterprises and NBCC were the worst performers. Sterling and Wilson Solar, Take Solutions, and Vipul Ltd were the top drags among smallcap constituents. 

Sectoral watch: Nifty Auto, FMCG, Media, Metal, and Realty were the only indices to end the day with losses. Nifty Private Bank index moved 1.85% higher while Nifty Pharma gained 1.93%. On BSE the telecom index gained close to 2% making it the best performing sectoral index on BSE. “Encouraging Chinese retail sales and industrial production data, hopes of vaccine and a flurry of corporate deals pushed indices higher. Volumes on the NSE were in line with recent averages. Banks and Pharma indices rose while realty index was down. Smallcap and midcap indices rose more than the Nifty,” said Deepak Jasani, Head of Retail Research, HDFC Securities.

Asian stocks gain: Among major Asian peers, only Nikkei 225 and TOPIX of Japan ended with losses. Shanghai Composite was up along with Hang Seng. KOSPI and KOSDAQ gained as well. 

Technical take: “The short term trend of Nifty is range bound with positive bias. Renewed buying enthusiasm could only occur above 11600 and that is likely to pull the market towards 11800 levels in a quick period of time. Important lower supports to be watched at 11380 and a breach below this support could trigger more weakness in the near term,” said Nagaraj Shetti, Technical Research Analyst, HDFC Securities.