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Taking stock: Hopes of stimulus package lift market; Nifty back above 9,300

Broader markets underperformed as the S&P BSE Midcap index rose 0.90 percent, while the S&P BSE Smallcap index was up 1.3 percent.

April 23, 2020 / 06:14 PM IST
 
 
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Indian market rallied for the second consecutive session in a row on April 23 on rising expectations of a second stimulus package from the government to support the economy.

The S&P BSE Sensex which started on a flat note rose nearly 500 points towards the close while the Nifty50 reclaimed 9300 levels which is a positive sign. The index witnessed selling pressure on April 17 and April 20 when Nifty50 climbed above 9300 levels.

"The expectation of early economic package announced by the government lifted sentiments on the markets today. Yesterday information and broadcasting minister Prakash Javadekar said the economic package will be announced as and when it’s ready, lifted market sentiments," Rahul Sharma, Research Head, Equity99 Advisors told Moneycontrol.

Let’s look at the final tally on D-Street – the S&P BSE Sensex rose 483 points to 31,863 while the Nifty50 rose 126 points to close above 9313 levels.

Broader markets underperformed as the S&P BSE Midcap index rose 0.90 percent, while the S&P BSE Smallcap index was up 1.3 percent.

“Indian benchmark indices traded positive, boosted by financials and IT. Hopes of another stimulus package are giving some support to the markets. The rising cases of infections are a worry and markets are hoping that it will peak soon,” Vinod Nair, Head of Research at Geojit Financial Services told Moneycontrol.

“The sustainability of this rally will depend on government measures to boost the economy and support the industries, once we emerge out of the lockdown,” he said.

Top Nifty gainers include names like ICICI Bank, ZEE Entertainment, ICICI Bank, TCS, and Kotak Mahindra Bank.

Top Nifty losers include names like Power Grid, Shree Cements, HUL, and Titan Company.

Stocks & Sectors

Sectorally, the action was visible in the S&P BSE IT index which was up 4.8 percent, followed by the S&P BSE Bankex that gained 3.3 percent, and the BSE Finance index was up 2.3 percent.

Selling pressure was visible in the S&P BSE Consumer Durable index that fell 1.4 percent, followed by the S&P BSE FMCG index that was down 1.3 percent, and the S&P BSE Power index was down 1.2 percent.

Volume spike of over 100% was seen in stocks like SRF, NIIT Technologies, Britannia Industries, Tech Mahindra, and Godrej Properties.

Long Buildup was seen in stocks like Glenmark, Idea, Muthoot Finance, and RBL Bank

Short Buildup was seen in stocks like Godrej Properties, Adani Power, Britannia Industries, and Oil India Ltd.

Stocks in the news:

Alembic Pharmaceuticals share price rallied 9.56 percent after the company reported healthy growth in earnings for the March quarter.

The drugmaker has reported an 81.4 percent year-on-year growth in Q4 profit at Rs 225 crore on a revenue of Rs 1,207 crore that grew by 30.2 percent.

Shares of Kotak Mahindra Bank climbed 8.59 percent, a day after the company said its board had approved raising of capital by way of issue of equity shares.

Shares of engineering and construction major Larsen & Toubro erased all gains of intraday trade and ended 1.41 percent lower. The company had witnessed strong order inflow in the quarter ended March 2020.

Shares of Parag Milk Foods closed 9.84 percent higher after promoters released 75 lakh equity shares pledged with Kotak Mahindra Investments by paying Rs 54 crore.

Shares of Hindustan Unilever fell nearly 3 percent in an otherwise strong market after the parent Unilever Plc withdrew its full-year forecast on Thursday, saying the hit from lockdowns in China and India.

Bank stocks logged healthy gains on April 23 on hopes of stimulus by the government. Besides, CNBC-TV18 said Jefferies has assumed coverage on 11 Indian financial stocks amid the COVID-19 pandemic.

Technical View:

Nifty formed a small bullish candle on the daily charts

For the time being, the index can be expected to consolidate with a 500 point range inside a trading band of 9400 – 8900 levels

If the index slips below 9170 levels then the index may come under selling pressure on an intraday basis with targets placed around 9050 levels.

Strength above 9343 may extend the upswing up to 9390 where ideally some selling pressure can be expected, and a strong close above 9400 levels shall open up bigger targets placed around 9950 levels.

Traders are advised to remain neutral on the long side whereas intraday traders can consider shorting below 9170 and look for an initial target between 9090 – 9050 levels with a stop above intraday high, suggest experts.

Kshitij Anand
Kshitij Anand is the Editor Markets at Moneycontrol.
first published: Apr 23, 2020 04:33 pm

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