Nifty ends higher but shows tentativeness around 12,000 again. What analysts say
Nifty has hit 12,000 level on an intra-day basis thrice in the past 10 sessions but failed to close above that level
Indian stocks markets ended higher, boosted by gains in auto stocks. The Nifty rose 0.28% to 11,930.35 after hitting 11,974.55 at day's high, while the Sensex gained 0.31% at 40,685.50. For the week, both the indexes gained more than 1% each. Nifty has hit 12,000 level on an intra-day basis thrice in the past 10 sessions but failed to close above that level.
The Nifty Auto Index rose nearly 3%, led by gains in Maruti Suzuki, which rose 4.3%, lead by gains as well as acting as the top boost to the blue-chip Nifty 50 index.
Other top gainers among the Sensex stocks included M&M, Tata Steel, PowerGrid, Bajaj Auto and NTPC.
Broader midcap and smallcap indices rose up to 0.7%.
"Nifty after opening gap-up remained in a narrow 66-point range for the day and closed towards the lower end of this range. Advance decline ratio was positive. Weekly close is positive after one week of loss. Optimism is returning though gradually to markets. Traders prefer to keep a limit on their exposure by switching sectors and stocks. This is evident from the volumes in the markets and the limited gains across the better part of the listed universe," said Deepak Jasani, Head of Retail Research, HDFC Securities.
Elsewhere, Aditya Birla Fashion and Retail rose 7.5% higher after Flipkart said it will buy a 7.8% stake in the company. Consumer electricals maker Crompton Greaves Consumer Electricals jumped 6% after a surge in second-quarter profit.
Here is what analysts said on today's market performance:
"Since we are approaching a mega global event (US Presidential election), we may see some volatility increasing. Although we could reclaim 12000 this week, the momentum was clearly lacking as the benchmark once again looked a bit tentative around this. A close below 11650–11600 would result in a short term trend reversal and hence, traders should start lightening up positions. Before this, intermediate supports are at 11820 – 11775."
Manish Hathiramani, Proprietary Index Trader and Technical Analyst, Deen Dayal Investments
The Nifty was stuck in a 75 point range for the day on the back of below-average volumes. This is characteristic of a rangebound market that is defined by indecisive movements. A clear direction will emerge only if we get past 12050 on the upside or break 11650 on the downside.
Sanjeev Zarbade, VP PCG Research, Kotak Securities
“Market mood was cheerful on a sharp decline in daily Covid-19 cases, expectations of a decent festive season and decent 2QFY21 earnings print for major companies. FPIs bought equities worth US$768 mn over the past five trading sessions while DIIs sold US$834 mn worth of equities in the same period. We advise investors to remain selective in buying stocks. Key events are stimulus discussions in the US, elections in the US and Covid-19 spread in Europe."
Ajit Mishra, VP - Research, Religare Broking Ltd
"All eyes are on US markets for updates on the stimulus package and upcoming presidential elections. The news on COVID-19 cases in Europe will also remain on the participants' radar. Volatility usually remains high in stocks during the earnings and we’re seeing a similar trend. Amid all, the market is offering ample trading opportunities but the key is to identify the right stock. Since the bias is still positive, we suggest continuing with the “buy on dips" approach." (With Agency Inputs)
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