Sensex, Nifty jump 1% as RIL, pharma, metal stocks shine

Benchmark indices rebounded sharply on Monday, ending higher, led by index heavyweight Reliance Industries, metals, pharma and financials.

Market started off the week on a positive note and extended gains through the day, witnessing across the board buying, taking a respite from profit-booking over the past week.

The volatility index which had touched 19 in the past week slipped 2.76 per cent to 16.74 at closing.

The BSE Sensex closed at 59,299.32, up 533.74 points or 0.91 per cent. It hit an intraday high of 59,548.82 and a low of 58,952.11. The Nifty 50 closed at 17,691.25, up 159.20 points or 0.91 per cent. It hit an intraday high of 17,750.90 and a low of 17,581.35. Amidst the broader rally, the BSE Smallcap index touched a fresh all-time high of 28715.93 on Monday.

Breadth remains positive

The market breadth remained positive with twice as many stocks advancing as compared to those that were decline. As many as 2,333 stocks advanced on the BSE, as compared to 1,016 stocks that were declined while 192 remained unchanged. Furthermore, 565 stocks hit the upper circuit as compared to the 173 stocks that were locked in the lower circuit. Besides, 316 stocks touched a 52-week high level and 24 touched a 52-week low.

Narendra Solanki, Head- Equity Research (Fundamental), Anand Rathi Shares & Stock Brokers, said, “Indian markets started on a positive note despite negative Asian markets cues amid Evergrande crisis. During the afternoon session markets pared gains but continued their firm trade. Sentiments got some support with Centre for Monitoring Indian Economy’s (CMIE) report that employment increased by 8.5 million in September, led by the salaried jobs category, as the unemployment rate declined to 6.9 per cent during the month.”

“In another positive development, foreign portfolio investors (FPIs) were stood as net buyers for the second month in a row in the Indian market with an investment of ₹26,517 crore in September. As per depositories’ data, FPIs pumped in ₹13,154 crore into equities and Rs 13,363 crore in the debt segment. However, markets trimmed some of their gains as traders were worried as trade deficit spiked to almost $23 billion in September from $13.8 billion in the previous month, as imports surged at a much faster pace than exports, driven by elevated global crude oil prices and purchases of gold in the build-up to the festival season,” added Solanki.

Investors are now awaiting the RBI monetary policy (October 8) and Q2 result season.

Binod Modi, Head Strategy at Reliance Securities, said, “Domestic equities witnessed sharp uptick today amid mixed global cues as steady improvement in key economic data in September and improved visibility of sustained economic outlook lifted investors’ sentiments.”

“Heavyweight financials witnessed strong rebound over 1 per cent today and supported market rally. Further, metal, realty, IT, and pharma indices also recorded healthy gains in the range of 1-2.5 per cent today. Additionally, Reliance Industries also gained over 1 per cent and supported market rebound. Midcap and smallcap indices continued to outperform broader market as investors continued to lap-up quality names from these spaces in the backdrop of improved visibility of earnings growth,” added Modi.

S Ranganathan, Head of Research at LKP securities, said, "As we approach the earnings season, Indices remained buoyant through the day led by the Metals & PSU names with the market breadth exhibiting positive momentum across Midcaps & Small-Caps. Privatisation hopes on few Metal names fuelled a 3 per cent upmove today on the Metal Index even as select Pharmaceutical & Speciality Chemical stocks had good buying interest today. This month is likely to witness almost a dozen companies going public aiming to mop up over ₹200 billion"

Divi’s Lab, Hindalco, NTPC, Bajaj Finsrv and Tata Motors were the top gainers on the Nifty 50 while Cipla, Grasim, UPL, IOC and Eicher Motor were the top laggards.

Metals shine

On the sectoral front, all indices closed in green. The rally was led by metals, financials, realty and pharma stocks.

Nifty Metal was up 2.99 per cent at closing while Nifty Realty was up 2.17 per cent. Nifty Pharma and Nifty Healthcare Index were up 1.54 per cent and 1.43 per cent, respectively.

Nifty Bank was up 0.95 per cent while Nifty Financial Services was up 0.96 per cent. Nifty Private Bank and PSU Bank closed 0.82 per cent and 2.10 per cent higher, respectively. IT stocks also gained, closing 0.99 per cent higher.

Broader indices outperform

Broader indices also closed in the green, outperforming the benchmarks.

Nifty Midcap 50 was up 1.84 per cent at closing while Nifty Smallcap 50 was up 1.25 per cent. The S&P BSE Midcap was up 1.51 per cent while the S&P BSE Smallcap was up 1.71 per cent.

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