Indian stock markets extended gains to the fifty day today with benchmark index Sensex rising 117 points today after the Reserve Bank kept interest rates unchanged but continued its accommodative stance to revive growth. The 30-share BSE benchmark briefly crossed the 51,000 level, before ending 117 points higher at its fresh closing record of 50,731.63. Similarly, the 50-share NSE Nifty scaled the 15,000 mark during the day but shed some ground to close at its all-time closing high of 14,924, up 0.2%.
In just five days, the Sensex has risen about 4,500 points or about 10%, its best since the week ending April 10, largely on optimism from measures announced in the Budget on Monday.
Here are 10 things to know about today’s market performance:
1) “The Nfity-50 & BSE Sensex Index gained more than 9% this week with Sensex breaking the 50,000 market and Nifty-50 close to the 15,000 mark. Market mood has been quite exuberant in the aftermath of the Union Budget along with stronger-than-expected earnings,” said Rusmik Oza, Executive Vice President, Head of Fundamental Research at Kotak Securities.
2) “A combination of positive sentiment, positive FII flows and very healthy earnings could keep markets at elevated levels in the near future,” he said.
3) SBI was the top gainer in the Sensex pack, rallying over 10%, followed by Kotak Bank, Dr Reddy’s, UltraTech Cement, ITC and HDFC Bank.
4) On the other hand, Axis Bank, Bharti Airtel, ICICI Bank, Maruti and HCL Tech were among the laggards.
4) Banking index, especially PSU banks, witnessed sharp rally, followed by pharma and FMCG indices.
5) Earlier in the day, the Reserve Bank of India (RBI) kept interest rates on hold while assuring to maintain support for reflating the economy by ensuring ample liquidity to manage the government’s near-record borrowing.
6) “RBI too did its fair share by complementing government visionary agenda for augmenting growth by keeping the repo rate unchanged while continuing with its accommodative stance. In order to facilitate massive government borrowing, one of the major announcements by RBI was to allow retail investors to directly invest in G-Secs online. This move suggests that the RBI will now directly compete with banks to attract retail savings deposits. Markets were cheerful as the inflation is estimated to be well under the tolerance band by the next quarter and the liquidity easing to the structurally weak sectors is taken care off especially for the NBFCs,” said Nirali Shah, Head of Equity Research, Samco Securities.
7) “This combined effort on reforms by the Government and RBI suggest the fostering of confidence and growth among the markets and economy which will aid in the bull rally in the long term,” she added.
8) Manish Hathiramani, Proprietary Index Trader and Technical Analyst, Deen Dayal Investments, said, “The markets have closed well in the green with supporting volumes. 15,000 has proved to be a psychological resistance but that should not deter the thought process on the trend. We continue to remain bullish and the Nifty has the wings to achieve 15200.”
9) “A buy on dips strategy would be advisable. There is ample scope for the markets to correct during intraday sessions. These dips can be utilised to make fresh long positions for higher targets. This way the risk-reward trade-off would be favourable,” he added.
10) “As the major events are behind us i.e. the Union budget and monetary policy meet, the focus will shift back to fundamentals as well as global cues. We might see some consolidation in the index early next week,” said Ajit Mishra, VP – Research, Religare Broking.