Bulls back in action as Sensex surges 300 points. But market experts cautious

Indian shares closed higher today, led by gains in banking stocks with State Bank of India or SBI surging 8% after reporting a big jump in quarterly profit. The Sensex rose 306 points to 34,287 - its seventh gain in eight days - while the Nifty ended 1.13% higher at 10,142. For the week, the Nifty 50 rose 5.9% and the BSE Sensex 5.75%, with both the indexes recording their second straight weekly gain.

Broader markets outperformed today with BSE midcap and smallcap indices surging 1.8% and 2.5% respectively.

SBI today reported a net profit of ₹3,581 crore for the March quarter, driven by a one-time gain from a stake sale in its credit card unit. The Nifty banking index gained 3.2%.

Among other shares, Reliance Industries Ltd hit a record high of ₹1,618 in intra-day trade. Tata Motors Ltd was the top gainer in the Nifty 50 index, ending up 12.44%. The company-owned Jaguar Land Rover said it raised $705 million loan from Chinese banks.

Here is what market experts said on today's market action:

Jimeet Modi, Founder & CEO, SAMCO Securities

"The index is now approaching crucial moving averages and resistance clusters which might act as resistance going ahead. However, there is no immediate crucial sign of weakness to rely on. The trend on higher time frame for Nifty is bearish and index is trading just above 20-week EMA, which may turn out to be a pullback rally. Going ahead Nifty may face strong hurdles in the zone of 10450 to 10550 which coincides with many pivotal levels such as 61.8% of the Fibonacci retracement of the recent down move."

Ajit Mishra, VP - Research, Religare Broking Ltd.

"The bulls were back in action after a day of pause, which helped the equity indices to inch higher. Initially, firm global cues triggered a gap-up start but those gains fizzled out in no time and then a gradual recovery was witnessed as the session progressed. "

"Our domestic markets are largely mirroring the global counterparts in the absence of any positive trigger on the local front. We reiterate our positive yet cautious view, citing immediate hurdle around 10,250 in Nifty. We feel the banking index still has steam left and that could help the index to inch higher alongside others. However, any negative development on the global front might derail the momentum. Traders should continue with “buy on dips" approach with a focus on stock selection."

Vinod Nair- Head of Research- Geojit Financial Services

"Indian indices, led by financials, came back strongly from yesterday’s indecisiveness, amidst positive global cues. The global positive sentiment was driven by additional stimulus measures from ECB. Investors are banking on a global economic recovery, fuelled by central bank policy measures to support the respective economies. Investors need to be a bit cautious since valuations are running high and the expected recovery is not yet visible in the numbers."

Sanjeev Zarbade, VP PCG Research, Kotak Securities

“The current week has been a good one for the global markets as major frontline markets posted a strong rally. The Nasdaq is almost at its all-time high. The rally has been driven by positive sentiment generated from gradual lifting of lockdown across economies, despite weak economic readings and civil unrest in the US. The Indian markets continued its momentum into this week as it is seen closing with gains of 6%. Consumer durables, Banks and Metal indices performed well during the week. While the government has announced Unlock-1, a worrisome factor is that the number of daily Covid-19 cases are not showing any signs of peaking out. Investors should be watchful now as weak economic growth coupled with premium near-term valuations could be headwinds for the market."

Source - LIVE MINT

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