Market Rebounds With Massive Rally After Election Drama
In the Nifty50 index, interestingly all the 50 peers end in the green territory with Adani Ports topping the index with more than 8 per cent gain
Dalal Street experienced three days of unprecedented volatility amid the uncertainty of the election outcome. However, on Wednesday BJP allies pledged their support to form a government. Subsequently, the market also rebounded with massive confidence and the benchmark indices, Nifty and Sensex surged along with robust recovery in Nifty Bank.
The National Stock Exchange (NSE) Nifty 50 index ended 3.36 per cent higher at 22,620, whereas the S&P Bombay Stock Exchange (BSE) Sensex also settled higher at 74,382 levels with 2,303 points or 3.2 per cent gains on the closing bell.
Nifty Moves
In the Nifty50 index, interestingly all the 50 peers ended in the green territory with Adani Ports topping the index with more than 8 per cent gain.
Additionally, the other winners were IndusInd Bank and Hindalco with more than 7 per cent gains. Hero Motocorp, M&M and Tata Steel gained more than 6 per cent, while Adani Enterprises, Shriram Housing Finance, Tata Consumer and Bajaj Finance secured more than 5 per cent gain.
In the laggards, BPCL, Larsen & Toubro, TCS and Power Grid gained marginally to end in the green territory.
Analyst Note
“The Indian equity market is currently experiencing dynamic movements characterised by substantial swings in both directions. After the downturn from the previous session, there has been a notable reversal fueled by short covering. Both counterparties are putting forth their best efforts in response to the news about the Lok Sabha election, resulting in whipsaw moves,” said Osho Krishan, Sr. Analyst (Technical & Derivative Research), Angel One.
The market has experienced substantial support from diverse sectors, resulting in a significant improvement in market depth. Presently, all focus is on the upcoming RBI MPC meeting and its potential impact on the market, added Krishan.
Sectoral Movement
In terms of sectoral performance, Nifty Bank displayed a robust recovery with 4.53 per cent gain, while Nifty Finance surged 4.15 per cent. PSU Bank also joined the league with nearly 3 per cent gain.
The FMCG index displayed its one of the best sessions with 4.3 per cent gains as investors sought to hide under defensive stocks. Pharma gained 3.6 per cent, while IT climbed 2.4 per cent. Metal and Auto also soared 5.75 per cent and 4.7 per cent respectively.
The more domestically focussed indices, mid-cap and small-cap also recovered in the session. Mid cap rallied 4.3 per cent, whereas Small cap gained 3.81 per cent.
Trading Guide
“Nifty's strong recovery from yesterday's low included a gap-up opening of 240 points. The sharp rebound in the second half of the session, closing above the 22,600 level, indicates a potential bullish reversal. If the price closes above the 22,800 level, it could potentially rise to 23,000 and above in the coming days. On the downside, 22,000 and 21,800 will act as immediate support levels,” said Mandar Bhojane, Research Analyst, Choice Broking.
India VIX dropped by 29.4 per cent intraday and settled at 18.885. According to the options data, the highest open interest (OI) on the call side is at the 22,800 strike price, followed by the 23,000 strike price. On the put side, the highest OI is at the 22,200 strike price, added Bhojane.
