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Sensex jumps 793 pts on FM stimulus, hope of US-China thaw; Nifty tops 11,050

PSBs rallied up to 9 per cent in trade on FM's announcement of upfront recapitalisation.

, ETMarkets.com|
Last Updated: Aug 26, 2019, 05.24 PM IST
In the 30-pack Sensex, 22 stocks ended in the green and 8 in the red with HDFC as the best performer and Vedanta the worst.
NEW DELHI: Equity benchmarks Sensex and Nifty rallied in a volatile trading session on Monday supported by PSU bank, FMCG and realty stocks as investors cheered the government’s decision to roll back the tax surcharge on FPIs and the measures to boost the economy.

Finance Minister Nirmala Sitharaman on Friday gave in to demands of overseas investors and announced rollback of the additional tax surcharge on FPIs levied in the Budget. The Finance Minister promised two more rounds of stimulus, including one specifically for the realty sector in the coming weeks.

The Budget proposal to hike surcharge on FPIs had spooked foreign investors, who withdrew more than Rs 24,500 crore from domestic equities in July and August.

PSB stocks rallied up to 9 per cent in trade on FM's announcement of upfront release of Rs 70,000 crore for PSU bank recapitalisation, which is expected to induce additional lending and liquidity to the tune of Rs 5 lakh crore.

US President Donald Trump's comments on trade negotiations with China also bolstered sentiments. Trump said his trade negotiators had received two “very good calls” from China on Sunday, hours after he waffled on whether he regretted the one-upmanship on tariffs on Friday, AP reported.

Market at a glance
BSE Sensex rallied 792.96 points, or 2.16 per cent, to 37,494, while NSE Nifty ended at 11,057, up 228.50 points or 2.11 per cent.

In the 30-pack Sensex, 22 stocks ended in the green and eight in the red with HDFC finishing as best performer and Vedanta the worst. YES Bank, Bajaj Finance, HDFC Bank and ICICI Bank joined HDFC on the gainers’ list, jumping up to 6 per cent.

Sun Pharma, Tata Steel, Hero MotoCorp and RIL were among the Sensex stocks that declined.

The BSE Midcap index advanced 1.57 per cent and the BSE Smallcap index 1.65 per cent, underperforming benchmark Sensex.

BSE Finance index recorded 3.86 per cent gain to top the sectoral return chart followed by Realty, Capital Goods indices and the Bankex. While BSE Metal index was the worst performer.

In terms of index contribution, HDFC twins, ICICI Bank and L&T were chart toppers while RIL, Sun Pharma, Hero MotoCorp and Vedanta were the top drags on Sensex.

Expert View
"After a super volatile session, Nifty closed at 11,058 with a gain of 229 points and formed a bullish pin bar candle on the daily chart. The index managed to close above its strong hurdle of 11,000 level, hinting the bulls are trying to gain an upper hand. The headline index has an immediate hurdle near 11,100-11,180 zone. Any decisive break above 11,180 can push it towards 11,350 in the near term and support is near 11,000-10,930" - Rohit Singre, Senior Technical Analyst, LKP Securities

Global markets
On the global front, Asian shares closed lower as deteriorating trade relations between the US and China shook confidence in the world economy and sent investors streaming to the safe harbors.

MSCI's broadest index of AsiaPacific shares outside Japan shed 1.9 per cent, and Australia 1.3 per cent. Japan's Nikkei lost 2.2 per cent, while Shanghai blue chips fell 1.2 per cent.

European stocks were mixed in morning trade as investors fled from riskier assets on escalating US-China trade tensions.

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