Today’s Market Summarised

Financial stocks take charge and boost the market up.

NIFTY opened the day at 17,823 and found resistance around yesterday’s high. The first sharp fall and quick rebound should have been an indication that it would be another bullish day. After 17,850 was broken, upward strength continued till the last 30-minute fall. NIFTY ended the day at 17,925, up 120 points or 0.67%.

BANK NIFTY opened the day at 36,945 and was very strong. It quickly crossed 37000 and after some effort broke 37,500 by noon. Even though profit booking near closing brought it slightly lower, Bank Nifty ended the day at 37,695, up 855 points or 2.32%.

NIFTY BANK (+2.3%), FIN NIFTY(+2%) and the PSU Bank(+1.5%) indices moved up the most for the third straight day of the week. NIFTY IT (+1.9%) saw profit booking even as Auto (+1%), Metal (+1.3%) and Realty(+1.2%) jumped.

Asian markets closed mixed in the day. European markets are all trading in the green currently.

News Picks

Financial stocks were the talk of the day. Bajaj Finserv(+4.9%) and Bajaj Finance(+4.4%) led the top-gainers list in NIFTY 50. Kotak Bank (+3.7%), Axis Bank (+2.5%) and HDFC Bank (+2.3%) also featured in the li1st.

Other financial stocks including CholaFin (+4%), ICICI Bank (+1.9%), SBI (+1.8%), AU Bank (+6.7%) and IDBI (+7.1%) also moved up.

Eicher Motors (+2.7%) continued its recovery and closed at its highest level since October 19th. Bajaj Auto (+2.1%), Ashok Leyland (+3.4%) and Maruti (+1.9%) helped the auto index close more than 1% in green.

TechM(-2.9%), Infosys (-2.8%), HCLTech (-1.7%) and Wipro (-1.1%) closed among the top-losers of NIFTY 50 with a global profit booking in tech stocks being seen. All stocks from NIFTY IT fell including LTI (-3.2%) and Coforge (-2.7%).

Crude oil prices reaching back to November levels, oil marketing company stocks including IOC (+2.8%), Hindustan Petroleum (+5.1%) and BPCL (+2.2%) shot up. Others including GAIL (+2.4%) and ONGC (+1.7%) also moved.

Steel prices increasing in the month along with interesting valuations for metal stocks helped them move up. Jindal Steel (+4.6%), JSW Steel (+3.5%), SAIL (+2.8%) and Tata Steel (+2.5%) shot up.

HFCL (+8%) has announced powering its network offerings with Artificial Intelligence (AI) based analytics, partnering with Bangalore-based Aprecomm. The stock shot up.

Tata’s NELCO (+5%-UC) moved up after winning a contract from ONGC to enhance its communication infrastructure at offshore sites.

Cement companies in South India have increased prices. India Cement (+3.1%) moved up.

Markets Ahead

Between full lockdowns on Sunday in Tamil Nadu and Services PMI coming out, markets shot up. The buy on rumour and sell on news psychology is what we are seeing currently.

India’s December Services PMI came out at 55.5 vs 58.1 last month. This indicates expansion but at a slower pace.

As we discussed yesterday, the 18k mark is what NIFTY is aiming for. With finance stocks firing on all cylinders today, it is closer to this mark. Bank Nifty has hit its highest level since November 24 and found resistance there. The options data indicate that 38,000 would be important tomorrow.

Kotak Bank and other stocks were the major contributors to NIFTY along with HDFC Bank and ICICI Bank. Infosys interestingly pulled the index down by more than 40 points.

The short positions being covered has so far pushed the market up. But NIFTY looks like it may face resistance at 18,000. For tomorrow, a gap-up and sustaining above this level can indicate bullishness and trigger more buying. If this level is not broken, we can expect consolidation for the first weekly expiry day of the year. 

Keep an eye out on NASDAQ and other IT stocks around the world for an indication on NIFTY IT tomorrow. Key levels of heavyweights like Reliance at 2,500 and HDFC at 2,700 will also have to be watched as resistances.

See you on The Stock Market Show at 7 PM!