Sensex, Nifty jump over 4 per cent in a rally led by auto stocks; here’s what moved share markets today

Domestic benchmark indices continued their upwards trajectory on Thursday, after making a brief halt on the previous day.

Domestic benchmark indices continued their upwards trajectory on Thursday, after making a brief halt on the previous day. S&P BSE Sensex surged 1,265 points or 4.23% to sit at 31,159 points, while the 50-stock Nifty reclaimed the 9,100 level after gaining 363 points or 4.15%. The rally on Dalal Street was led by auto and banking stock. “Market Breadth was in favor of bulls. For every loser, there were more than seven gainers. All sectors contributed in today’s rally led by Auto, Banking, and Metals. India VIX closed below 50. This is bullish for the market in the near term. Going forward, Nifty will find support around 8700 levels whereas resistance will be around 9210-9350. Nifty may test 9400-9550 in the coming week,” said Vishal Wagh, Research Head, Bonanza Portfolios.

Following global cues: S&P 500 jumped by 3.4% in the last trading session, while on the Asian markets Hang Seng gained 1.38%; followed by a 1.61% jump in KOSPI and Shanghai Composite Index went up by 0.37%. 

Investors get richer by Rs 4 lakh crore: With the beaming equity markets, investors locked in their homes owing to the coronavirus pandemic got a reason to rejoice with investor wealth going up by Rs 4 lakh crore. The market capitalisation of the BSE listed firms went up to Rs 120 lakh crore at the end of Thursday’s trading session from Rs 116 lakh crore on Wednesday.

Hope of another government stimulus: After various media reports surfaced claiming that the center government is working on another economic relief package, this time aimed at the struggling sectors, markets surged forward. “Indian markets in sync with Global markets were up again today on expectations of infections peaking out and for more stimulus measures to be announced. This uptrend seems to be a short term bear market rally and may not be sustainable. In India, there is speculation that the package may help worst affected sectors and MSMEs may get some relief in the package to be announced,” said Vinod Nair, Head of Research, Geojit Financial Services.

Auto stocks make hefty gains: All constituents of the S&P BSE Auto index ended the day in green. Motherson Sumi Systems led the pack gaining over 17%; followed by Mahindra and Mahindra; Maruti Suzuki and Tata Motors all gaining over 10%. Mahindra and Mahindra was the biggest gainer on the 30-stock S&P BSE Sensex. 

Here’s what experts say:

The consistent buying in FMCG and pharma pack has triggered rebound from the lower levels and now rotational recovery in the other sectors is helping the index to inch higher. At the same time, we have a list of fundamentally sound counters, from both largecap and midcap space, which are witnessing buying interest on every dip. However, it could be a temporary relief rally as the worries over the economic impact of the pandemic would continue to weigh on investor sentiments. We thus advise maintaining a stock-specific approach for both trading and investment: Ajit Mishra, VP – Research, Religare Broking

The indexes moved up in the last two trading sessions bringing some comfort to the market participants. The market movement has been in line with market movements in other markets.  It may not be correct to perceive this advance to recognize a bottom formation at this juncture. It is too early to make that conclusion as the full economic ramifications of the demand destruction caused by the pandemic and which it is likely to cause is yet to come to full play as yet. The market has in the meantime closed on a positive note ahead of the long weekend covering Good Friday to Easter Sunday, but the picture on the ground looks quite distressful for most of Europe and North America: Dr. Joseph Thomas, Head of Research – Emkay Wealth Management.

Technical Outlook:

The overall trend of Nifty continues to be positive. Having moved up sharply, minor profit booking can’t be ruled out from the highs of 9200-9300 levels by this week, which could be a buy on dips opportunity for the near term. A sustainable move above 9200-9300 could take Nifty towards the further higher levels of 9800-10000 levels in the next few weeks: Nagaraj Shetti, HDFC Securities

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