The markets posted a remarkable rally today after many subdued sessions. After opening flat, the market regained strength with the passage of session as value buying emerged in the beaten-down banking and financial stocks. Nifty ended 3.2 percent higher driven by a surge in banking index which ended with the gain of 7.3 percent. Axis Bank up by 14 percent, ” by 10 percent and HDFC Bank up by 6 percent.
— CNBC-TV18 (@CNBCTV18Live) May 27, 2020
The BSE Sensex rallied 996 points on Wednesday, led by massive gains in banking and IT stocks ahead of the expiry of monthly derivatives amid firm overseas cues. After hitting a high of 31,660.60 during the day, the 30-share index settled 995.92 points or 3.25 percent higher at 31,605.22.
Similarly, the broader NSE Nifty surged 285.90 points or 3.17 percent to 9,314.95.
Deepak Jasani, Head Retail Research, HDFC Securities, told Firstpost, “The Indian indices ended strong on the penultimate day of the May series F&O expiry. The markets, after opening higher, reacted immediately but formed a bottom around 0950 hours to start a smooth sharp rally during the day with small corrections. Large banks, IT, metals and cement stocks rose after witnessing institutional buying.
Major Asian stock markets were mixed Wednesday as US-Chinese tension over Hong Kong competed with optimism about recovery from the coronavirus pandemic. Benchmarks in Shanghai and Hong Kong retreated after the White House said a proposed national security law might jeopardize the Chinese territory’s status as a global financial centre. European stocks rose on Wednesday, underpinned by expectations that the European Union will announce a massive stimulus program for the region’s recovery efforts, though investors were keeping an eye on simmering China-US tensions.
“Technically the Nifty seems to have made an intermediate bottom at 8806 on May 18 going by the extent of rise today. It could now face resistance at the downgap resistance of 9351 and later at 9553. On falls it could take support at 9179,” Jasani said.
The market participants, however, booked profit in defensive sectors and thereby the FMCG, media and pharma indices ended in the red territory.
Sumeet Bagadia, Executive Director, Choice Broking, told Firstpost, “Finally, the Index settled its closing at 9315 level with the gain of 285 points and managed to give a closing above 9300 level which is a good sign for the time being. Moreover, mostly large cap constituents performed well which help the index to climb above 9300 level. Even BankNifty performed very well after giving a jovial opening, lastly closed at 18710 level with the gain of 1270 points. At present level, downside support comes at 9200-9100 while upside resistance comes at 9350-9450,” Bagadia said.
On stock specific, Axis Bank, Wipro and ICICI Bank were the top gainers while Sun Pharma, ZEEL and UltraTech cement ended as the top laggards.
Going ahead, investors will keep a close eye on announcements for lockdown restrictions and economic policies, development of coronavirus vaccines, crude oil prices, and US-China tensions.
Manish Hathiramani, Index Trader and Technical Analyst, Deen Dayal Investments, told Firstpost, “The Nifty50 more than made up for its sluggish trading over the last few days – in today’s session, we did not breach the crucial level of 8980 but went right ahead and crossed 9175 which was the price point for the upside to get activated! The markets moved smartly and with an extraordinary vigor and closed above 9300. If we can keep above 9350 in the next few trading sessions, we could achieve levels closer to 9700.”
Despite concerns over COVID-19, market participants preferred to accumulate stocks ahead of the expiry of May futures and options contracts, propelling benchmark indices, experts said.
Further, positive cues from most global markets and strong foreign fund inflows also enthused domestic investors, they said. Foreign portfolio investors purchased equities worth a net Rs 4,716.13 crore on Tuesday, provisional exchange data showed.
Bourses in Tokyo and Seoul ended with gains, while Shanghai and Hong Kong closed in the red.
Stock exchanges in Europe were trading with significant gains in early deals.
International oil benchmark Brent crude futures slipped 0.91 per cent to USD 35.84 per barrel.
Meanwhile, the number of coronavirus cases in India climbed to 1,51,767 and the death toll touched 4,337, as per health ministry data.
Globally, the number of cases linked to the disease has crossed 55.89 lakh, with the death tally at around 3.50 lakh.
Rupee settles 5 paise lower against dollar
The rupee depreciated 5 paise to settle at 75.71 (provisional) against the US dollar on Wednesday, as market participants were concerned about rising tensions between the US and China amid coronavirus pandemic.
Forex traders said rupee was trading in a narrow range as positive domestic equities, rising optimism about a potential coronavirus vaccine and a revival of business activities were offset by a flare-up in US-China tensions, according to PTI.
Moreover, strengthening of the American currency overseas also weighed on the domestic unit.
At the interbank forex market, the rupee opened strong at 75.72 and gained marginal ground to finally closed at 75.71, down 5 paise over its last close. It had settled at 75.66 against the US dollar on Tuesday.
During the session, the local unit witnessed an intra-day high of 75.57 and a low of 75.74.
Meanwhile, the dollar index, which gauges the greenback’s strength against a basket of six currencies, rose by 0.17 per cent to 99.08.
“Rupee is trading in a very tight range, and not breaking the psychological level of 76. There is some optimism in the forex market over coronavirus vaccine and foreign inflows pertaining to Bharti Airtel Telecom stake sale, Kotak Mahindra Bank QIP or Reliance Jio but it its getting offset by the escalating US-China trade tensions.
“US President Donald Trump has already said that he is preparing against China over his efforts to impose national security on Hong Kong. The global growth is already in doldrums due to COVID-19, worsening relations between these two nations will further hobble growth,” said Rahul Gupta, Head of Research- Currency, Emkay Global Financial Services.
Unrest in Hong Kong over Beijing’s proposed national security laws weighed on global shares and oil prices on Wednesday, offsetting optimism about the re-opening of the world economy.
— With PTI inputs
Updated Date: May 27, 2020 16:26:22 IST