Indian stock markets closed at a three-month high today after they extended gains to the third day. Banking and pharma shares led the gains. The NSE Nifty 50 index ended up 0.65% at 10,311, its highest since March 11 while Sensex closed 180 points higher at 34,911. The Nifty Pharma index ended up 2.2%, while the bank index rose 1.74%.
Among the Sensex stocks, Axis Bank and Kotak Bank gained 3-4% while PowerGrid, Bajaj Finserv, Bajaj Finance and Bajaj Auto rose between 4.3% and 6.6%.
In the pharma pack, shares of Glenmark Pharmaceuticals Ltd spiked 27% after the drugmaker received regulatory approval to make and sell favipiravir for treating mild-to-moderate COVID-19 infections.
Meanwhile, the threat of rising coronavirus infections in parts of Europe and the United States kept global markets subdued. India's total COVID-19 cases rose to 425,282, the health ministry said.
Here is what market analysts said on today's market action:
Siddhartha Khemka, Head - Retail Research, Motilal Oswal Financial Services
“Domestic market cheered the regulatory approvals for domestic pharma companies to manufacture COVID-19 drugs and the global liquidity further provided support. However, the global sentiments were weak as rising coronavirus cases in the US and Europe raised more doubts about a quick economic rebound."
"Going ahead, we expect the markets to remain range-bound after the recent rally as the concerns remain over increasing infections both globally and domestically. Investors would also track the ongoing situation of India and US with China. Thus we would advise investors to stay cautious while look for buying opportunities on declines in market and focus more on stock specific action.
"Technically, Nifty has to continue to hold above 10250 zones to extend its move towards 10500 zone, while support is now shifting higher to 10180 and 10040 levels."
Shrikant Chouhan, Executive Vice President, Equity Technical Research at Kotak Securities
“Positive US futures helped domestic markets to end higher. Nifty and Bank Nifty both have changed the trading range by crossing the levels of 10330 and 21810. The new trading range could be between 10150 and 10550 for the Nifty. For the Bank Nifty, it could be 21500 and 23000. Bank Nifty should outperform Nifty in the next upmove. However, Nifty has formed a doji star formation at the top of the current rally. Doji conveys a sense of indecision or tug-of-war between buyers and sellers. Neither bulls nor bears were able to gain control and a turning point could be developing. Buying should be done in the market either on dips or only if it crosses the level of 10410. The world markets would be influential for our market."
Ruchit Jain, Senior Analyst - Technical and Derivatives, Angel Broking
“Nifty continued with the momentum seen in the tail end of last week and began the week on a positive note. However, the index oscillated within a range for rest of the session and ended around the opening level, adding gains of 0.65 percent to the previous close.
"Although the index then consolidated within a range, the stock specific momentum was robust and the broader markets provided good trading opportunities for day traders. On the daily chart, the index has been trading within a ‘Rising Wedge’ formation and the higher end of the pattern is in the range of 10500-10600. Looking at the overall momentum, we are of the opinion that the index would move higher in the near term to test the above mentioned range. Hence, momentum traders are advised to continue to trade with a positive bias and look for stock specific opportunities on any intraday dips. The intraday supports for the index are placed around 10260 and 10210 whereas resistances are seen around 10440 and 10500."
Vinod Nair, Head of Research at Geojit Financial Services
"In spite of renewed global concerns regarding the second wave of coronavirus infections, Indian markets ended positive. Markets chose to focus on regulatory approvals to domestic pharma companies to manufacture covid-19 treatment drugs and the expectation that this would lead to faster recoveries. As such, the pharma index was the major sectoral gainer in today’s trade. Concerns remain with regard to the increasing infections and the ongoing situation with China, and investors are advised to keep a short term outlook for the time being."