Indian shares ended higher today after three days of losses but could not sustain gains as a late slide in banking stocks and Reliance Industries capped gains. The Sensex surged over 700 points at day’s high but closed 167 points higher at 30,196. The Nifty ended just 0.63% higher at 8,879.10. The indexes, down about 27% this year, have seen sharp falls in the last three sessions as India’s economic relief measures disappointed markets.
Other Asian markets had risen today after news that early-stage tests on a possible COVID-19 vaccine showed promise while Dow had staged a big rally overnight.
Shares in Bharti Airtel Ltd jumped 11.3% and hit a record high as the telecoms firm reported a 15% rise in quarterly revenue. The Nifty banking index closed 0.5% lower. Among the Sensex stocks, RIL today fell 2% while SBI, IndusInd Bank, SBI and Axis Bank were among the other losers.
Banking stocks have been among the worst performers in 2020, with the industry staring at more defaults by businesses hit by the COVID-19 pandemic.
The number of cases in India surged past 100,000 today.
Here is what experts said on today’s market action:
Shrikant Chouhan, Executive Vice President, Equity Technical Research at Kotak Securities
“For the last two days, our markets have been moving against the global markets trend. Bank Nifty failed to rejoice the bullish momentum seen in world markets. Nifty also failed to sustain at higher levels and closed below the level of 8900. The Nifty has formed bearish continuation formation. Traders need to be careful below the level of 8850 as the index may fall to 8700 or 8500 in the near term.”
Ajit Mishra, VP – Research, Religare Broking Ltd.
“Markets were dealing with the rapid rise in COVID-19 cases and extension of lockdown and the disappointment from the economic package has worsened the situation. The fear of further deterioration in asset quality of banks and NBFCs has triggered a sharp fall in the banking and financials of late and we do not see this easing out anytime soon. Traders have no option but to align their positions according to the market trend while keeping a check on leveraged positions.”
Vinod Nair, Head of Research at Geojit Financial Services.
“Markets around the world rallied on the back of a positive vaccine trial in the US, because of which Indian markets also witnessed a positive opening. It later pared gains to end up by just around 0.6%. Although trial of the vaccine seemed to give positive results, the development of this is still in the very initial stage and is some time away from approvals and production. Meanwhile in India, confirmed infections crossed the one lakh mark, with no signs of slowing down. Additionally, with the stimulus measures seen to be inadequate to boost demand in the short term, Investors need to be cautious in this market, as the uncertainties still persist.”
Vishal Wagh, Research Head, Bonanza Portfolio
“Banking stock continued to see selling pressure on higher levels as worries over worsening assets qualities enhance skepticism on the higher side. Going forward, Nifty will find support around 8800, and resistance will be at 9000 levels.” (With Agency Inputs)