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Sensex ended 99 points higher today
Sensex ended 99 points higher today

Sensex, Nifty end higher but continue to 'test the patience of traders'

  • Reliance Industries ended at a record high
  • IT stocks also provided support to the markets

Indian markets ended higher today but off day's highs, led by a rally in Reliance Industries. However, gains were capped by declines in the banking and financial sectors after rating agency Moody's warned of challenging economic and credit conditions stemming from COVID-19 for Indian banks. The broader NSE Nifty 50 index ended up 0.32% at 10,802.7 and the benchmark S&P BSE Sensex finished 99 points higher at 36,693.69.

Reliance Industries shares finished at record 1,938 after gaining as much as 3.7% in the session on Qualcomm's 730 crore investment in the conglomerate's Jio Platforms arm.

The broader markets underperformed and ended flat. "We’re seeing hesitation in the market at the higher levels despite upbeat global cues and it could be largely due to caution ahead of the earnings announcements. Besides, the continuous underperformance of the banking index, which holds significant weightage in the index, is also adding to the chaos," said Ajit Mishra, VP - Research, Religare Broking,

Manish Hathiramani, Index Trader and Technical Analyst, Deen Dayal Investments, said: "We were unable to sustain above the 10850 level and gave up the gains of the morning quite swiftly. The Nifty retraced to take support around the 10750 level and bounced to close above 10800. The range continues to test the patience of traders! However one must be cautious in a range bound market and should only enter trades on breakouts on the upside and breakdowns on the downside."

Here is what analysts said on today's market performance

Joseph Thomas, Head of Research, Emkay Global Financial Services.

“That frontline indexes were higher at the opening but lost altitude with a sell off in the financials. Banks took a beating and it may be mentioned that the sector has been severely impacted by the lockdown and the moratorium and a rise in NPAs is expected as the moratorium is lifted. Non-food credit also has been slower in growth impacting fresh business. IT and FMCG helped the indexes to hold well in the positive territory. This trend may sustain for some more time"

Deepak Jasani, Head Retail Research, HDFC Securities

"Volumes on the NSE were on the lower side with defensives and metal sector doing well while financials and realty lagged. Technically, with the Nifty bouncing back strongly from the lows, the bulls are not willing to give up easily. Further upsides are likely once the immediate highs of 10882 are crossed. Weakness could however emerge if the supports of 10756 are broken."

Vinod Nair, Head of Research at Geojit Financial Services

"In a volatile day of trade, the market gave up almost all of its early gains, before closing out the day with a positive bias. Financials ended negative while IT and FMCG led the sectoral gains. Markets are hoping for further stimulus measures from the RBI, following expectations of a softening of inflation rates, which would give RBI room for further rate cuts. Investors are advised to be cautious and to look at stock specific movements with regards to earnings announcements and the commentary."

Ajit Mishra, VP - Research, Religare Broking Ltd.

"Markets ended marginally higher in a volatile trading session, in continuation of the prevailing consolidation phase. The beginning was upbeat, thanks to firm global cues. However lack of follow-up buying combined with the decline in the banking majors pushed the index gradually lower. Traders should maintain extra caution now as stocks usually react sharply, even on a small dip in the benchmark. Defensive viz. pharma, FMCG and IT usually do well in such a scenario so plan your positions accordingly."

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