Today’s Market Summarised

Breakout in the index continues with the bulls pushing Bank Nifty to new all-time highs.

Nifty opened the day at 17,552 and moved down to take support near the 17,500 mark. Yesterday this level was a resistance and today it acted as a support. After slowly moving back and breaking the day-high, Nifty even broke the 17,600 level in the last hour of trade. With the bullishness, Nifty closed the day at 17,629, up 110 points or 0.63%.

Bank Nifty opened the day with a small gap-up at 36,947 and tried breaking 37,050 multiple times. And once this was broken, there was no looking back. The index slowly and steadily kept on moving up till it hit a fresh all-time high at 37,720. Bank Nifty closed the day at 37,668, up 816 points or 2.22%.

Nifty PSU Bank(+5.43%) once again outperformed all others, followed by Bank Nifty(+2.2%). Nifty FMCG(+1.24%) and Nifty Finserv(+1%) also closed with gains. Nifty Media(-1.7%) once again saw a correction.

Asian markets closed mostly in the red today. European markets are trading in the green currently.

News Picks

The major banks with maximum loan exposure to Vodafone Idea – IndusInd Bank(+7.3%), SBI(+4.%) and ICICI Bank(+1.8%) gained to close among Nifty 50’s top-gainers. Axis Bank(+1.4%) and Kotak Bank(+1.88%) also closed with gains.

Banks were boosted by multiple factors including Vodafone Idea. SBI said it will give home loans at 6.7% irrespective of the loan amount. Kotak Mahindra Bank cuts lending rates across tenures effective today. 

And the announcement of a bad bank, which could improve asset qualities of stressed PSU Banks is expected to be announced at 5 PM by the Finance Minister. Hence the rally in PSU Banks.

Vodafone Idea(+25.7%) rallied to hit its highest levels since March of this year. Yesterday’s bullishness after the telecom sector reforms by the government continued in the stock.

IndusTowers(+10.1%), IDFC First Bank(+4.7%), Yes Bank(+15.7%), PNB(+7.8%) and many other related stocks also gained in the day.

ITC(+6.8%) gave a breakout early in the morning and contributed a lot of points to Nifty’s move. The stock has hit a 7-month high.

Crude oil prices gave a breakout, as we had shared in the Top International News article, and many oil-related stocks gained. IOC(+1.68%), OIL(+2.7%), HPCL(+2.4%) gained in the day. BPCL(-10.3%) fell after the stock went ex-dividend for its record Rs 58/share dividend.

Easy Trip Planners(+19.5%) said it has expanded its business to the Philippines, Thailand, and the USA.

With news that the India GST council is likely to discuss raising the GST rate of solar modules, iron, copper, aluminium and other metals, Nifty Metal closed in the red. Tata Steel(-1.26%) and JSW Steel(-1%) closed as top-losers in Nifty 50, with NMDC(-1.3%) and Jindal Steel(-1.6%) also falling.

Markets Ahead

Markets once again surprised bears by shooting up to all-time highs. It has been a while since Nifty and Bank Nifty both hit fresh highs on the same day. 

Out of those who contributed to Nifty today, Reliance was the most significant giving more than 30 points. And interestingly, as we wrote yesterday, the silent breakout in ITC became a very strong breakout today. Hope you caught this move.

The major contribution was however put in by all the top banks. ICICI Bank, HDFC Bank, SBI, IndusInd Bank, Kotak Bank and Axis Bank together contributed nearly 80 points in Nifty’s 110 point rally today. So it was a combined effort by the banks which pushed up Nifty.

And as we had discussed yesterday, our bearish view was broken once Nifty breached 17,500 and the bulls did indeed take over. And that too with so much power!

Even though there was a sell-off and profit booking in Hindustan Unilever(-0.26%), Infosys(-0.54%), TCS(-1.3%) and other IT stocks, this alone could not hold down the market. At one point just near noon, even Reliance(+2.1%) which was till then in the red, shot up.

We had waited to see if the confidence in telecom and bank sectors did continue and indeed it did. Along with this, the expectation of the announcement of a Bad Bank today(which actually pushed Bank Nifty up during Budget Week in February too) helped the market continue its dream rally.

Short sellers surely booked a loss on a day where portfolios will have closed in bright green.

I am curious, were you holding on to ITC shares? Let us know in the comments section of the marketfeed app!