Sensex rallies 320 points, Ultratech, Reliance, HDFC twins up; check key reasons

The domestic stock markets closed higher Thursday amid firm global cues and a strong performance by index-heavyweights Reliance Industries and HDFC twins. Sensex rallied 320.62 points to end at 41,626.64, while Nifty jumped 99.70 points to 12,282.20. The NSE advance-decline ratio stood at 3:1. Ultratech Cement was the top gainer in the Sensex pack, surging 4.37 per cent, followed by Tata Steel, IndusInd Bank, L&T, Reliance Industries, SBI, HDFC, HDFC Bank, Axis Bank, ONGC and ITC. On the other hand, Bajaj Auto, TCS, Infosys, NTPC, Nestle India, Kotak Bank, and Hero MotoCorp fell up to 0.89 per cent. The rupee depreciated 11 paise against the US dollar to 71.33 (intra-day). Brent futures, the global oil benchmark, advanced 0.42 per cent to USD 66.28 per barrel.

“The market breadth was also inclined strongly on the advancing side, in continuation of the recovery in the midcap and smallcap space. Though the upside seems capped in the benchmark index, we believe the recent buoyancy in the broader markets is certainly encouraging. Having said that, we suggest maintaining caution while selecting bets from the midcap and smallcap space,” Ajit Mishra, VP – Research, Religare Broking said.

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“NIFTY staged a strong pullback today and ended just short of its lifetime high levels. Despite the lifetime high closing levels, the NIFTY is just a whisker away from the intraday lifetime highs. That being said, the session saw moves highly dominated with the weekly options expiry. The highest PUT OI shifted from 12200 to 11250 strikes and this saw the NIFTY moving past the 12250 levels. On the other hand, the maximum Call OI stayed constant at 12300 which did not allow the NIFTY to go beyond this level. Markets are expected to see incremental highs but in the same breath, the markets also continue to remain highly vulnerable at higher levels. The RSI, which is a lead indicator is showing a bearish divergence again as it did not mark a fresh high along with the NIFTY. It would be prudent to protect profits at higher levels and follow the upside moves in a cautious manner…,” Milan Vaishnav, CMT, MSTA, Consulting Technical Analyst said.

Meanwhile, on a net basis, foreign institutional investors sold equities worth Rs 58.87 crore, while domestic institutional investors purchased shares worth Rs 208.47 crore on Wednesday, data available with stock exchanges showed. Foreign portfolio investments in India significantly improved in the current calendar year, after receiving the second-highest investments in the last five years. The country received Rs 1,36,835 crores as FPI in 2019, while it was heavily withdrawn to the extent of over Rs 80,000 crores in 2018, according to the National Securities Depository Limited (NSDL).