Some analysts don't rule out some profit-taking in near term after Sensex surged about 2,700 points in just four days
Bajaj Finance was the the top gainer in the Nifty 50 index today, ending 10.46% higher
Indian shares staged a sharp rally today, extending gains to the fourth day. Optimism around reopening of the economy after a months-long coronavirus boosted investor sentiment. The Sensex settled 879 points higher at 33,303, extending its four-day gains to about 2,700 points while NSE Nifty 50 index ended up 2.57% at 9,826. Financial stocks rallied today with Nifty bank index closed up 3.43%.
The government on Saturday approved a phased exit from lockdown from today, permitting restaurants and malls to reopen from June 8, but extended lockdowns in high-risk zones until June 30.
Among the Sensex stocks, Reliance Industries Ltd rose 3.9% and HDFC Bank Ltd gained 3.4%. Shares of Bajaj Finance Ltd, the top gainer in the Nifty 50 index, ended 10.46% higher.
Here is what analysts said on today's market action:
Shrikant Chouhan, Executive Vice President, Equity Technical Research at Kotak Securities
“The market opened higher on the back of optimism as investors cheered the resumption of selective economic activity under Unlock 1.0 phase. The arrival of monsoon as per the Skymet Weather agency and uptrend in other Asian markets led by gains in Hang Seng also helped the sentiment remain upbeat in local equities. However, Nifty and Sensex lost nearly 1.50% gains from the highest point of the day as profit-taking in European equities and Dow Jones futures prompted investors here to exercise caution. Technically, the market has managed to surpass the previous highest level of 9,889 which is positive for the market. On the other side, the Nifty earlier resistance levels 9550/9600 would act as a major support for the market. The strategy should be to buy on dips."
Vinod Nair, head of research at Geojit Financial Services
"The positive sentiment is being driven by hope of situation getting back to normalcy, aided by the steady opening up of the economy and further stimulus measures to boost demand."
Manish Hathiramani, technical analyst at Deen Dayal Investments
"The markets had a very impressive run and kept above the 9800 levels until closing. Profit-booking at these levels cannot be ruled out. However, the trend continues to remain positive and every dip can be used to accumulate the Nifty for a target of 9950-10000."
"Benchmark indices continued the rally on the fourth straight day on June 1 after government relaxed some lockdown norms to revive the economy. All the sectorial indices ended in the green which suggest buyers are active in markets. At present level, Nifty is facing resistance at 10000 mark crossing above it can show 10300-10400 level with the support of 9700-9600 levels."
Ajit Mishra, VP - Research, Religare Broking Ltd.
"The announcement of gradual easing of lockdown boosted the sentiment which further strengthened with the buoyancy in the global markets. Besides, the news of the timely arrival of monsoon also aided the surge. Mostly sectoral indices participated in the move with noticeable buying interest on the broader front which gained nearly 3% each.
The recent surge indicates that markets are focusing more on the optimistic side and anticipating a favorable scenario. We suggest maintaining a positive yet cautious approach as Nifty has again reached closer to the next resistance zone of 9,950-10,050. Besides, the continuous spikes in the COVID-19 cases and subdued earnings may cap the upside ahead. On the global front, further deterioration in the US–China relations is another important factor that could unsettle the global markets. In short, traders should use a further surge to liquidate aggressive longs around the hurdle and wait for any dip to reenter."
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