Markets jump from day’s lows; Sensex, Nifty close with gains of 1% each

Mumbai: Till last week, people waited for a dip. The market obliged them for four sessions till yesterday. Today, the indices got tired of waiting for people to participate and leaped ahead. The point to ponder is - how many people would have entered in the last four days. The market has again underlined the fact - “Fortune favors the brave”!

National Stock Exchange’s Nifty closed at 5,708.05, up 55.90 points or 0.99% from previous close and Bombay Stock Exchange’s Sensex ended the session at 18,804.75, up 173.65 points or 0.93%.

Tracking Trade:

Today, the market opened flat inspite of deep cuts in the US markets last night. The lows for the day were registered soon after the open. Nifty made a low of 5,636.95 and Sensex touched the levels of 18,581.49. Thereafter, the market meandered in a narrow range till midday. 

The European markets opened with mild weakness and later turned positive. Indian equities then started to move up without any hesitation and closed near the highs of the day. Nifty made a high of 5,721.10 and Sensex touched the level of 18,847.81. Nifty October Future closed with a fat premium of around 38 points.

Today, the Nifty snapped its three day downward move and displayed strength. Indian markets opened flat inspite of the US markets losing 128 points last night. The flat opening in itself was therefore show strength by the Indian markets and smart traders would not have failed to notice this.

The Nifty slipped slightly below yesterday’s low and immediately moved up. It also held on to its 20 DMA which is around 5,650. The index still remains within the 100 point range of 5,640 to 5,740. However, today the index managed to trade and close above yesterday’s high of 5,686.50. This is a sign of strength. If the index holds above this level tomorrow, a sizeable move on the upside could be expected. The index has also corrected its “overbought” situation on the momentum indicators. All these factors would increase the hopes of the bulls for the last session of the week.

There was an interesting move in the stock of Kingfisher Airlines. It closed at Rs 11.45, up almost 5% from previous close. Today it moved up on the back of positive news giving some relief to its investors.

Bank Nifty closed at 11,431.30, up 139.80 points or 1.24% from previous close. This was the strongest of the three important indices traded on the NSE. Like the Nifty, Bank Nifty slipped slightly below yesterday’s low and immediately moved up. It also held on to its 20 DMA which is around 11,200. 

Though the Bank Nifty traded within a 200 point range of 11,320 to 11,540 for most part of the day, it closed above yesterday’s high of 11,380.25. This is a clear sign of strength. If the index manages to trade above this level tomorrow, there may be a sizeable move on the upside. Like the Nifty, Bank Nifty has also corrected its “overbought” situation on the momentum indicators. 

CNX IT closed at 6,268.70, up 42.90 points or 0.69% from previous close. This was relatively the weakest of the three important indices traded on the NSE. Though the index closed above yesterday’s high of 6,263.65, it seems to be consolidating in a 150 point range of 6,190 and 6,340. It has held on to its 50 DMA which is around 6,160 levels. However, today is the fifth consecutive session when it has managed to close below its 20 DMA which is around 6,370 levels. 

The results of Infosys which will be declared tomorrow will play a big role in deciding the direction of CNX IT. However, it must be remembered that the index is near a strong support zone. It is trading in close proximity to its 200 DMA which is around 6,140 levels and also near the 38.2% Fibonacci retracement level of the move from 5,460.70 (July 26) to 6,643.80 (September 14) which is around 6,190 levels. A disappointment from Infosys may lead to some slide in CNX IT, but there is a very high probability that it may be restricted near its 200 DMA. 

India VIX closed at 16.49, down 2.02% from previous close. The index continues to trade in the 1.70 point range of 15.60 to 17.30. A big move in this index may be expected only if it breaks out of this range on either side. It is the range bound movement in this index which highlights the complacent attitude of the market.

The broader market closed in positive territory. The BSE Midcap Index closed with a gain of 1.16% and BSE Smallcap Index ended the session with a gain of 0.84%.

Out of the 13 sectoral indices traded on the BSE, only one closed in the red. The biggest gainers were BSE Realty Index (4.61%), BSE Capital Goods Index (2.04%), BSE Metal Index (1.61%), BSE Power Index (1.41%) and BSE Bankex (1.30%). The sole loser for the day was BSE Healthcare Index (-0.13%).

The top five Sensex gainers were BHEL (2.59%), Bharti Airtel (2.46%), Tata Motors (2.31%), Sterlite Industries (1.98%) and Tata Steel (1.86%). The top losers included Maruti (-0.96%), M&M (-0.89%), Hero MotoCorp (-0.43%) and Wipro (-0.15%).

The market breadth closed on a positive note. Out of 2,971 stocks traded on BSE, 1,656 advanced, 1,183 declined and 132 remained unchanged.

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