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Home / Markets / Stock Markets /  Sensex roars back with about 1,000-point gain. Key triggers for today's rally

Indian markets finished today's session with strong gains with Sensex and Nifty surging closed over 3% as institutional investors stepped in to buy beaten-down banking stocks. Supported by positive global cues, the Sensex soared 995 points to 31,605 while Nifty settled 3% higher at 9,314. The Nifty banking index rose 7%, with Axis Bank surging 14.2% and heavyweights HDFC Bank and ICICI Bank gaining 5.8% and 9%, respectively.

Axis Bank surged after a report said private equity group Carlyle was in discussions with the lender for a fund infusion. Axis Bank however clarified that it has not taken any such decision in this regard.

Experts said that the sudden rise in banking shares forced some investors to cover their short positions ahead of the derivatives expiry on Thursday.

The banking index lost 8.3% last week and is down 41.8% so far this year on concerns of defaults by businesses hit by the COVID-19 pandemic.

The Nifty information technology index was one of the top gainers, ending 2.8%, higher, led by a 3.7% surge in Infosys Ltd and a 3.2% gain in TCS.

Here is what analysts said on today's market action:

Sahaj Agrawal, Head of Research- Derivatives at Kotak Securities

“Markets have been consolidating in the past few trading sessions. Trend support for Nifty 50 is seen at 8800; broader markets remain strong above the same. On the higher side the initial target is seen at 9500, above which further upside up to 10,000 remains a possible. Open interest concentration is seen at 9000 put and 10000 call for the June series. Open interest addition is seen in banking and IT stocks; expect the same to trade with a positive bias."

Manish Hathiramani of Deen Dayal Investments

"The Nifty 50 more than made up for its sluggish trading over the last few days in today's session, we did not breach the crucial level of 8980 but went right ahead and crossed 9175 which was the price point for the upside to get activated. The markets moved smartly and with an extraordinary vigor and closed above 9,300. If we can keep above 9350 in the next few trading sessions, we could achieve levels closer to 9700."

Vinod Nair, Head of Research at Geojit Financial Services.

"The benchmark indices staged an intraday rally in sync with global cues, as some pockets of value buying emerged. In spite of rising number of infections, markets expect slow return to normalcy, when lockdown 4.0 ends this week. All sectoral indices were in the green and institutional buying in banking stocks helped the bank index gain by over 7%. The volatility is expected to continue, ahead of tomorrow’s F&O expiry."

Sumeet Bagadia, Executive Director, Choice Broking

"At present level, downside support for Nifty comes at 9200-9100 while upside resistance comes at 9350-9450. Going ahead investors will keep a close eye on announcements for lockdown restrictions and economic policies, development of coronavirus vaccines, crude oil prices, and US-China tensions." (With Agency Inputs)

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