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Party continues on D-Street: Sensex zooms 1,075 points, Nifty reclaims 11,600

Foreign brokerages raised targets on Indian equities, adding to the upbeat sentiment.

, ETMarkets.com|
Last Updated: Sep 23, 2019, 04.31 PM IST
Mumbai: Benchmark equity indices continued their euphoric rally for the second day on Dalal Street with Sensex jumping 1,075 points to hit its highest level in more than two months as investors cheered the historic cut in corporate tax rate.

Foreign brokerages raised targets on Indian equities, adding to the upbeat sentiment.

According to dealers stock prices and index levels were not updating on NSE for a few minutes towards market close. An NSE spokesperson could not immediately comment.

BSE’s 30-share Sensex closed 2.83 per cent or 1,075.41 points higher at 39,090.03, its highest close since July 17, while NSE’s 50-share Nifty climbed 2.92 per cent or 329.20 points to close at 11,603.40, the best close since July 17.

It was Sensex and Nifty’s second-highest gain in percentage terms since May 19.

Over the last two sessions, Sensex has added 8.30 per cent or 2,997 points. Around Rs 3.52 lakh crore has been added to the market cap in the last two sessions.

"Market rose for the second day in a row, after the historic decision to cut corporate tax, witnessed a stellar rally,” said Devang Mehta, head – equity advisory, Centrum Wealth Management.

Mehta pointed out that a lot of buoyancy has come in the market from the fact that the corporate tax cut move will boost the profitability of a number of companies, which will either be used to stimulate demand by lowering prices, payouts to shareholders in the form of dividends or using it for capital expenditure.

“Along with short covering, a lot of pent up demand to buy good businesses was also visible. Market is also sensing meaningful rate cuts from the Reserve Bank of India in its bimonthly monetary policy due in the first week of October,” he added.

Others experts also shared the view.

“Rally continued as the positive sentiment for revival in earnings growth attracted investors to the market. Banks outperformed while mid & small cap witnessed strong bargain buying in expectation of turnaround in consumption story and improvement in balance sheet,” said Vinod Nair, Head Of Research at Geojit Financial Services.
“Government’s fiscal measures will support recovery in the economy which will add more color to the H2FY20 GDP estimate,” added Nair.

Among sectoral indices, BSE Capital Goods index led the gainers’ pack with a 6.55 per cent rise. BSE Bankex and BSE Industrials followed next with 5.68 and 5.14 per cent gains respectively.

Bulls were in favour as advancing shares beat declining ones on the BSE in the ratio of 1.7:1. As many as 16 out of 30 Sensex stocks closed in the green.

Financials led the gains for Sensex. HDFC twins contributed the most to the index’s gain. Private lender HDFC Bank rose 4.86 per cent, while mortgage lender HDFC climbed 5.22 per cent.

Hindustan Unilever, ICICI Bank, Kotak Mahindra Bank, Asian Paints, HDFC Bank and Bajaj Finance were six Sensex stocks that scaled 52-week highs on Monday.

On the outlook, the market sounded cautious.

"Nifty maintained its bullish stance for second consecutive day and given closing at 11,603 with gains of 330 points forming a doji candle pattern on the daily chart, hinting at indecision in the market,” said Rohit Singre, Senior Technical Analyst at LKP Securities

Singre added that support for Nifty is coming near 11,540-11,480 zone and resistance is coming near 11,650-11,700 zone.

Global Markets
World stocks dropped as weaker-than-expected economic surveys added to investor worries over the unresolved US-China trade dispute’s effects on the global economy, while oil gained more than 1 per cent as Middle East tensions remained elevated.

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