Sensex, Nifty extend gaining streak to 6 days ahead of RBI MPC tomorrow; key things from today’s trade

Rallying for the sixth consecutive session on Thursday, BSE Sensex and Nifty 50 ended on a 7-month high ahead of RBI MPC outcome scheduled for tomorrow. The S&P BSE Sensex jumped 304 points, or 0.76 per cent to settle at 40,183 levels while the broader Nifty 50 index finished at 11,835, up 96 points, or 0.82 per cent. Index heavyweights such as HDFC Bank, Infosys, TCS, ICICI Bank and HCL Tech contributed the most to the indices’ gain. Broader market underperformed the equity benchmarks in Thursday’s session. S&P BSE MidCap index gained 0.29 per cent to close at 14,827, while the S&P BSE SmallCap index finished 0.26 per cent lower at 15,010. “Expectation of a stimulus in India and the US has improved. Initially, the thought was that the domestic stimulus will be small due to weak fiscal position, which changed positively post few comments from government officials, and now the expectation has become bigger,” said Vinod Nair, Head of Research at Geojit Financial Services.

IT stocks lead: UltraTech Cement was the top Sensex gainer, followed by Tata Consultancy Services shares which jumped over 3 per cent as company’s second-quarter results beat the Street estimates. HCL Tech, Infosys, HDFC Bank, Sun Pharma, Tech Mahindra, ICICI Bank, Nestle India and HUL were among other Sensex gainers. “A good start to Q2 result led by the IT & Banking sector, along with positive announcements like buyback has lifted the market,” said Nair.

ONGC, RIL worst performing stocks: Index heavyweight Reliance Industries Ltd dragged the most in today’s session. Along with RIL, ONGC, L&T, Power Grid Corporation of India, Asian Paints, Kotak Mahindra Bank and IndusInd Bank were among top Sensex laggards.

Nifty IT, Nifty Pharma top sectoral gainers: Barring Nifty FMCG index and Nifty Media index, all the sectoral indices ended in the green. Nifty IT and Nifty Pharma were to sectoral gainers. Stocks such as Cadila Healthcare, Cipla, Biocon, Divis Laboratories gained the most in Nifty Pharma index.

Technical take: “The Nifty cooled off after a flying start; this could be a situation of profit booking. However the overall trend continues to remain positive and we could accumulate long positions on dips with a target of 12000 and then 12200 keeping a stop loss of a closing below 11400,” said Manish Hathiramani, proprietary index trader and technical analyst, Deen Dayal Investments.

All eyes on RBI MPC tomorrow: Participants will now be eyeing the outcome of the MPC’s policy meet scheduled tomorrow, October 9. “It is widely expected that RBI would maintain the status quo on rates however, the commentary on growth, moratorium and inflation would be actively tracked. Further, stock-specific volatility would remain high as more companies would announce their quarterly numbers,” said Ajit Mishra, VP – Research, Religare Broking Ltd.