Markets snap 4-day losing streak, end higher; PSU banks led the rally

Overall, Sensex climbed by nearly 1.7% and Nifty 50 over 1.5% on Monday with an intraday high of 60,833.78 and 18,084.10.

After market hours, Sensex rose by 721.13 points or 1.2% to close at 60,566.42. While Nifty 50 surged by 207.80 points or 1.17% to end at 18,014.60. Bank Nifty rallied by 962.10 points or 2.31% to settle at 42,630.15.

Except for pharma and healthcare stocks, all other sectoral indices recorded sharp upside. On NSE, the PSU Banks index skyrocketed by a whopping 7.3%, while Media, Realty, Private Banks, and Metal indices soared between 2-3%. Nifty Financial Services also advanced by nearly 2%.

On BSE, Bankex zoomed over 968 points followed by Capital Goods jumping over 601 points. The auto index climbed nearly 350 points. Consumer durables, metals, oil & gas, and IT index advanced between 1-2%.

In the broader market, smallcap indices on both NSE and BSE surged between 3-4%, while midcap indices jumped between 2-3%.

Stocks like IndusInd Bank, SBI, Tata Steel, Bajaj Finserv, ITC, Axis Bank, Ultratech Cement, HDFC Bank, NTPC, Tata Motors, ICICI Bank, and HDFC stocks were top gainers. While stocks like Nestle, Kotak Bank, Sun Pharma, and HUL were top bears, however, the downside in these stocks was at a slower pace.

Talking about markets performance, Vinod Nair, Head of Research at Geojit Financial said, “After a four-day selloff, the domestic market was refuelled by bottom fishing and optimistic sentiment from global counterparts. PSBs led the rally, while mid-and small-cap stocks outpaced the benchmark. Contrary to the trend, global concerns over the recession and COVID spread continue to remain high, which will sustain volatility in the market.”

According to Ajit Mishra, VP – of Technical Research, Religare Broking, markets started the week on a strong note and gained over a percent, taking a breather after the recent slide. After the initial uptick, the Nifty index gradually inched higher as the day progressed however some profit-taking in the last half an hour trimmed some gains. Eventually, it settled at 18,014 levels; up by 1.17%. Most of the sectoral indices participated in the recovery wherein realty, banking, metal, and energy packs posted decent gains. The broader indices too rebounded swiftly and gained in the range of 2.8%-4%.

At the interbank forex market, due to the positive tone in Indian stocks and pullback in the greenback, the rupee appreciated closing at 82.65 per dollar. The local unit had opened at 82.79 and ranged from 82.63-82.83 in the intraday against the American currency. Last week, on Friday, the rupee closed at 82.82 per dollar.

Going forward, Mishra said, “Participants shouldn’t read much into a single-day rebound and wait for the sustainability of the move. We have the next hurdle around the 18,150-18,200 zone in Nifty so we recommend utilising further recovery to reduce positions. In absence of any major event, the upcoming expiry of December month derivatives contracts will keep the traders busy.”

For Nifty 50, Rupak De, Senior Technical Analyst at LKP Securities said, the momentum indicator remains with a bearish crossover, implying weakness. The trend is likely to remain weak over the near term. The supports are pegged at 17,950/17,800, whereas on the higher end, resistance is placed at 18,100.

As for Bank Nifty, Kunal Shah, Senior Technical Analyst at LKP Securities said, the index downside support now stands at 42,000 where aggressive put writing has been observed. The next hurdle on the upside is seen at 43,000 where the highest open interest is built up on the call side. The index remains in buy mode as long as the mentioned support is held on a closing basis.

Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of Mint. We advise investors to check with certified experts before taking any investment decisions.