Sensex extends rally to 2nd day, Nifty Bank adds 7.5% in two days; here’s what analysts make of today’s trade

Buoyed by the positive global cues ahead of US presidential poll outcome, BSE Sensex and Nifty 50 gained over one per cent each to end in the positive territory for the second straight session on Tuesday. BSE Sensex surged 503.55 points or 1.27 per cent to end above the crucial 40,000 mark, at 40,261. While the broader Nifty 50 index added 144.35 points or 1.24 per cent to finish the session at 11,813. Bank stocks led the rally today, with ICICI Bank as the top performer, jumping over 6.5 per cent. HDFC Bank, State Bank of India (SBI), Axis Bank were among other stocks which contributed the most to the indices gain. The broader market underperformed the equity benchmarks today. S&P BSE MidCap index gained 62 points or 0.42 per cent to end at 15,021, while S&P BSE SmallCap index settled 52 points or 0.35 per cent up at 14,834. Nifty Bank index gained 7.5 per cent so far this week. India VIX dropped nearly 4 per cent to 24.2 levels.

Rajesh Palviya, Head Technical & Derivatives, Axis Securities

The daily price action has formed a bullish candle and closed above the previous session’s high indicating positive bias. Nifty managed to give close above 11800 and sustainable move above this may cause strength towards 11950-12050 levels, on the other hand, 11700 is immediate support zone. The daily RSI and Stochastic both have turned bullish which supports upside momentum. Banking and Financial stocks rallied in last two trading session and Bank Nifty has highest open interest for the year 2020 with almost 19 lakh share indicates we may continue further more upside momentum from Banking and financial stocks in coming trading sessions.

Ajit Mishra, VP – Research, Religare Broking Ltd

All eyes are on the US election and participants will be closely eyeing the signals from global indices for cues. We’re already witnessing volatile swings across the board and do not expect any relief from that front in the near future. Considering the scenario, traders should prefer defensives and other low beta stocks until we see some stability.

Vinod Nair, Head of Research at Geojit Financial Services

The market maintained its momentum, supported by increased demand for banking stocks due to improvement in the business outlook. Globally too, the market was on a strong footing as the US manufacturing data surpassed expectations and a similar rebound was seen across Europe and China. Markets are also sustaining its confidence ahead of the upcoming Fed meeting, as it is not expecting an increase in rates and easing measures to recover the economy.

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

It is not advisable to initiate or keep short positions in the market. The longs would trigger if we can keep above the 11800-11850 levels for a couple of days and that should take the index to 12200-12300 levels during the course of this month. Until this happens, traders are advised to maintain a cautious stance and wait for the right time to enter into directional trades.