Indian extended gains to the third day today boosted by a record close in Reliance Industries. But a record spike in domestic COVID-19 cases curbed gains. The NSE Nifty 50 index rose 0.53% to 10,607 while the S&P BSE Sensex advanced 177 points to 36,021. Both indexes notched their third straight weekly gain.
Market heavyweight Reliance Industries climbed 1.6% to an all-time closing high after the investment arm of US chipmaker Intel decided to pay some $255 million to buy a 0.39% stake in the digital unit, Jio Platforms.
The Nifty and Sensex have rebounded sharply from a coronavirus-fuelled slump in March, but remain around 13% lower for the year.
Financials stocks were among the worst performers today with Nifty Bank index falling 0.46%. HDFC Bank Ltd and IndusInd Bank Ltd dropped around 1.5% each.
Global markets inched higher after data showed a brisk pickup in Chinese service sector activity in June and as U.S. nonfarm payrolls saw a better-than-expected jump.
Here is what experts said on today’s market performance:
Jimeet Modi, Founder & CEO, SAMCO Securities & StockNote
“Nifty 50 after forming a spinning top candle in the previous week has rallied swiftly. The index is now hovering around 10600 mark which had acted as strong support on the way up and might turn into a crucial resistance. Each leg of the rally from March till now is getting narrower in the price range and the whole rally has occurred in the form of a rising wedge pattern which is bearish and might be nearing its termination. Though there is a lot of optimism on the Street and global equities on the hope of positive developments on drug trials, we assume the market is overbought in the short term and expect limited upside. Going ahead we suggest investors to remain cautious as any negative development on global equity might trigger a risk aversion sell off. Support for the index is now placed at 10200.”
Vinod Nair, Head of Research at Geojit Financial Services.
“The benchmark indices ended with a gain of 2.4%, on a weekly basis, as optimism about a continued recovery in economic activity offset the concerns raised by unabated rise in virus infections. Globally the US monthly employment report and domestically the PMI survey, seemed to indicate that the worst of the lockdown economic impact is over. However, any extension or resetting of lockdown measures, due to increasing infections, could negate the gains. Progress of a vaccine trial also added to the optimism. In spite of improving economic data, markets are still largely moving on hope rather than on any real change in the ground realities. With intraday volatility increasing, investors are advised to remain cautious.”
Sanjeev Zarbade, VP PCG Research, Kotak Securities
“It was a good week for global equities as concerns over reports of a resurgence in Covid-19 infections in the US were offset by improving macroeconomic data points as reflected by the strong non-farm payrolls data in the US. Even economic data from China has shown continued strength. Market mood remained buoyant, bolstered by an uptick in activities and consumption. After a period of sustained one-way movement, it is natural for investors to get complacent. They should guard against this. Risks to the markets emanate from further spiraling of infections and flare-up on Indo-China border.”
Rohit Singre, Senior Technical Analyst at LKP Securities.
“Index closed a week above with gains of more than 2% forming a bullish candle on weekly chart. Index has good resistance near 10700-10800 zone and one can use mentioned levels to book profit on every rise, good support is shifted at 10500-10400 zone so until holding above said levels we may see strength to be there and one can use buy on dip strategy around said levels. Nifty Bank closed a week again below 22k mark at 21852 with gains of 1.21%, support for Nifty Bank is coming near 21500-21200 zone and resistance is coming near 22300-22500 zone”.
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