Stocks

Over 300 stocks hit upper circuit as market surges on global cues

BL Internet Desk | Updated on October 06, 2020

Sensex gains 600 pts; more than 300 stocks hit upper circuit limits

Bears have yet again been caught on the wrong foot. Benchmark indices Sensex and Nifty have staged a sharp recovery in line with improved global sentiments since September.

Mirroring global sentiments, the Nifty rose 1.38 per cent, or 159 points, to 11,662. The Sensex gained 1.54 per cent, or 600 points, at 39,574. Over 300 stocks hit their upper circuit and 153 rose to new 52-week highs.

Derivative data suggest a huge unwinding of leveraged positions when the markets fell in September and, hence, after making a low at around 10,800, the Nifty index made a recovery. Last month, the Sensex and the the Nifty fell nearly 10 per cent from the highs.

 

Positive signals

In September, the US markets, too, were in a downward trend but talk of another mega stimulus package just ahead of the elections in November sparked a rally in stocks. On Monday, the Dow Jones, Nasdaq and S&P rose 1.5-2 per cent. Talk of Covid vaccine becoming available by December has yet again given a push to the sentiment.

“Going ahead, the market would track the development of the US stimulus package and the September quarter earnings season that kickstarts tomorrow, with TCS reporting its numbers along with buyback details. Besides, the RBI will now hold the MPC meet on October 9, and investors will be watching for the commentary on the economy.

Technically, Nifty formed a bullish candle and gave the highest daily close since February 26. A hold above 11,500 can move Nifty towards 11,800-12,000 while support has moved higher at 11,450-11,350,” said Siddhartha Khemka, Head - Retail Research, Motilal Oswal.

Experts say the subsiding China-related border tensions has been a key sentiment booster. Yet, traders are not taking leveraged bets as SEBI’s new margin norms require them to bring more money to the table to trade.

Foreign institutional investors purchased stocks worth ₹1,101 crore in the cash market. In the futures market, they were sellers to the tune of ₹513 crore in the index segment and ₹125 crore in the stock futures.

 

Published on October 06, 2020

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