Equities gain nearly 1% on global cues; IT, Metals in focus

BL Mumbai Bureau | Updated on: Jun 27, 2022

Sensex closes 433 points higher; Nifty above 15,800

The benchmark indices closed nearly 1 per cent higher on Monday.

Markets started the week on a positive note amid strong global cues as easing oil prices lifted investor sentiments. Indices extended gains through the day. Though off the day’s high, indices closed in the green, led by IT and metals.

The BSE Sensex closed at 53,161.28, up 433.30 points or 0.82 per cent. It recorded an intraday high of  53,509.50 and a low of 53,120.79. The Nifty 50 closed at 15,832.05, up 132.80 points or 0.85 per cent. It managed to breach the 15,900 level during the day, recording an intraday high of 15,927.45. It recorded an intraday low of 15,815.50.

Breadth remains positive

The market breadth remained positive with 2,386 stocks advancing on the BSE as against 1,038 that declined while 151 remained unchanged. Furthermore, ten stocks hit the upper circuit compared to the eight that were locked in the lower circuit. Besides, 75 stocks touched a 52-week high level and 48 touched a 52-week low.

Deepak Jasani, Head of Retail Research, HDFC Securities, said, “Nifty gained for the third consecutive session on June 27, though gave up some gains during the day. Among sectors, IT, Metals and Capital Goods indices rose the most. Advance decline ratio ended sharply in the positive even as the Smallcap index outperformed the Nifty.”

“Falling inflation expectations and easing of Covid-19 restrictions in China that lifted global commodities helped assuage sentiments in global markets,” added Jasani.

Market is likely to remain volatile this week as June month F&O contracts will see settlement this Thursday, as per analysts.

Shrikant Chouhan, Head of Equity Research (Retail), Kotak Securities Ltd said, “Bulls kept the momentum going for the third straight session, as buoyancy across the global markets boosted sentiment. The rally was led by IT stocks, which had come under relentless selling in the recent sell-offs.”

“While the change in mood has come as a major relief, the optimism may remain for a few more sessions before the market turns volatile amid concerns slowing global economy due to rate hikes and continuing foreign fund outflows. Currently the market is trading near its important resistance level and the texture of the chart suggests there is a strong possibility of a quick intraday correction from the current levels,” added Chouhan.

ONGC, Coal India, L&T, HCL Tech and UPL were the top gainers on the Nifty 50 while Eicher Motor, Apollo Hospitals, HDFC Life, Kotak Bank and Britannia were the top losers.

Mitul Shah, Head Of Research at Reliance Securities said, “The domestic equities started the week on a positive note as concerns of rising global inflation is cooling down.”

“Crop sowing has picked up its pace and could avoid a worsening of food inflation. Monsoons will heavily influence India’s economic outlook in the coming weeks. Farmers and the Indian government are banking on the monsoon rains to keep rice production, inventories and food inflation at a manageable level. Interest rate hikes, growing concerns about corporate profits and economic growth continue to throttle investor sentiments amid global issues of Russia-Ukraine war and rising COVID cases,” said Shah.

“While Oil and food input prices have majorly pushed up inflation, commodity prices are showing signs of settling down as copper witnessed its sharpest weekly fall since Mar’20. FIIs have sold more than $39 billion over the past 9 months, making it the largest and longest sell-offs, even worse than the global financial crisis of 2008. Moreover, the GST Council is meeting on June 28-29 and are likely to consider e-way bill mandatory for intra-state movement of gold or precious stones worth ₹2 lakh and above, and e-invoicing mandatory for certain B2B transactions,” Shah further added.

All in green 

On the sectoral front, all the indices closed in the green with IT and metals gaining focus.

Nifty IT closed over 2 per cent higher while Nifty Metal was up 1.5 per cent. Nifty Auto, Nifty FMCG, Nifty Private Bank, Nifty Realty and Nifty Oil & Gas each closed nearly 1 per cent higher.

Smallcaps gain

Broader indices also closed in the green with Smallcaps recording higher gains.

Nifty Midcap 50 was up 1.05 per cent while Nifty Smallcap 50 was up 1.61 per cent. The S&P BSE Midcap was up 0.87 per cent while the S&P BSE Smallcap was up 1.57 per cent.

The volatility index rose 2.21 per cent to 21.01.

Published on June 27, 2022
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