Press "Enter" to skip to content

Taking Stock | Market extends gains into third session; experts say trade with caution –

Headline indices the Sensex and the Nifty ended in the green for the third consecutive session on May 21, supported by gains in heavyweights such as ITC, TCS, Asian Paints, Maruti Suzuki and Reliance Industries.

The market witnessed mild bouts of volatility due to weekly F&O expiry. Eventually, the Sensex closed the day 114 points, or 0.37 percent, higher at 30,932.90 while Nifty finished with a gain of 40 points, or 0.44 percent, at 9,106.25.

Broader markets outperformed the benchmarks. The BSE Midcap and Smallcap indices settled 0.76 percent and 0.72 percent higher, respectively.

The Indian market traded in the green despite weak global cues. Market experts say that the signs of easing of lockdown after the government’s go-ahead to domestic airlines to resume operations may have influenced the sentiment.

However, the market is expected to trade in a range during the coming sessions until further directions from the government about the lockdown.

Ajit Mishra, VP- Research, Religare Broking, is of the view that even though the government has allowed certain economic activities in the fourth phase of the lockdown, it would take time to boost the sentiment on the ground.

If coronavirus cases continue to rise, it would be difficult for the government to further ease the lockdown, which may again derail the possibility of a sustained recovery.

Mishra believes volatility will continue and the underperformance of the banking and financial space would remain the major overhang. In the present scenario, participants should limit their naked leveraged positions and focus more on stock selection, he said.

Top Nifty gainers included ITC, Hindalco, Asian Paints, Hero MotoCorp, Maruti and UPL, which gained between 3-7 percent.

Top Nifty losers included Bajaj Finserv, Bajaj Finance, NTPC, IndusInd Bank, Adani Ports and Grasim, which lost between 2-4 percent.

Stocks & Sectors

Among the sectoral indices, Nifty Auto, with a gain of 2.61 percent, emerged as the top gainer followed by Nifty FMCG that gained 2.19 percent.

Nifty Metal and Media gained 1.83 percent and 1.76 percent, respectively.

On the other hand, Nifty Bank, Private Bank, Financial Service and Realty indices ended in the red with losses up to 0.69 percent.

Long Buildup was seen in stocks like IndiGo, ITC, United Breweries, Hindalco and United Spirits.

Short Buildup was seen in stocks like Bandhan Bank, Cholamandalam Investment and Finance Company, Bajaj Finserv, Bajaj Finance and NTPC.

More than 250 stocks, including AU Small Finance Bank, Balrampur Chini, Centrum Capital, Edelweiss Financial Services, Inox Wind, SpiceJet, Lemon Tree Hotels and Suzlon Energy, hit their upper circuits on BSE.

Stocks in news

Most financial stocks came under pressure after concerns expressed by Moody’s on the liquidity stress as a fallout of asset quality deterioration.

Shares of Ajanta Pharma gained 3 percent after broking house Motilal Oswal had retained its bullish view on the stock as the company reported strong Q4 earnings.

Shares of Jubilant FoodWorks jumped over 3 percent as brokerage houses remained positive on the stock after poor Q4 earnings, expecting strong recovery with better execution capabilities. CLSA retained buy call on the stock and raised price target to Rs 1,850, while Morgan Stanley has an overweight rating with a target of Rs 1,900.

Shares of IRCTC remained locked in 5 percent upper circuit as bookings open for passenger trains. The Indian Railways has released the list of 200 trains that will start running from June 1.

Shares of Bajaj Auto gained about 2.6 percent after its March quarter earnings surpassed analysts’ expectations.

The share price of Bajaj Finserv shed almost 4 percent after the company’s consolidated net profit for March quarter fell 77 percent to Rs 194.4 crore due to contingency provisions for the coronavirus outbreak.

Technical view

The Nifty settled above 9,100 but failed to hold on to strong intraday gains and formed a Shooting Star pattern on daily charts.

A ‘Shooting Star’ pattern is formed when the index comes under selling pressure as traders start booking profits at higher levels. This pattern is usually formed in an uptrend and is treated as a reversal pattern, but it would require confirmation before concluding that the trend will get reversed in the near future.

Experts expect the rangebound trade to continue in the coming days and feel 9,050 could be a crucial level for the downside.

Moneycontrol Ready Reckoner

Now that payment deadlines have been relaxed due to COVID-19, the Moneycontrol Ready Reckoner will help keep your date with insurance premiums, tax-saving investments and EMIs, among others.