Sensex erases all 2020 losses, Nifty ends at 8-month high; here’s what analysts make of today’s trade

As Democratic candidate Joe Biden inched closer to the win in the US presidential elections, BSE Sensex and Nifty 50 ended at 8-month high on Thursday. According to analysts, investors are anticipating new supportive measures from ongoing Fed policy meet while keeping rates unchanged. The S&P BSE Sensex rallied 724 points, or 1.78 per cent to settle at 41,340 while NSE’s Nifty ended at 12,120, up 212 points, or 1.78 per cent. State Bank of India (SBI) led the Sensex gainers followed by Tata Steel, IndusInd Bank, Bajaj Finance, HCL Technologies and Tata Consultancy Services (TCS). Index heavyweights such as Reliance Industries Ltd (RIL), Kotak Mahindra Bank, HDFC Bank and Bajaj Finance contributed the most to the indices’ gain. The broader markets too performed in line with the equity benchmarks. S&P BSE MidCap index jumped 1.74 per cent to end at 15,349, while the S&P BSE SmallCap index finished at 15,136.46, up 1.70 per cent.

Deepak Jasani, Head of Retail Research, HDFC Securities

The Nifty is 38 points away from turning positive for 2020. The Sensex turned positive for the year, surpassing the level of 41,253. Investors across the globe appear happy that there may not be a “blue wave” outcome in the U.S. elections, as seen in the rally in world markets. Nifty crossing the recent high with an up gap and a very positive advance-decline ratio mean that a fresh upthrust could have begun. Nifty could face resistance at 12246 and 12430 on the upside while 12018-12025 could provide support in the near term.

Manish Hathiramani, proprietary index trader and technical analyst, Deen Dayal Investments

The trend of the Nifty continues to remain positive. The hurdle of 11900-11950 has been crossed convincingly on the back of very good volumes. We should be achieving the targets of 12300-12400 during the course of the November series. The Index now has very good support at 11500.

Nagaraj Shetti, Technical Research Analyst, HDFC Securities

The short term trend of Nifty continues to be positive and one may expect further upside in the market for the short term. Having showed an upside breakout of the key resistance, the Nifty could encounter the next crucial resistances of around 12250/12430 levels in the near term. Immediate support is placed at 12000-12050 levels.

Abhishek Chinchalkar, CMT Charterholder and Head of Education, FYERS

The Nifty 50 index has managed to cross the 12000-12025 resistance zone that was held for all of October. Sustainability above this zone would signal an end to the recent 3-week consolidation and open door for a directional up move in the days ahead, with immediate resistances seen at 12247 followed by the life-time high of 12430. Meanwhile, support for the index lies at 11870. As long as that holds, the bias is skewed to the upside. That said, it is worth keeping in mind that until the US election outcome is reached, volatility is likely to prevail in the financial markets. Hence, it is prudent to trade with strict stop losses in the next few days and place strong emphasis on risk management and position sizing.