Today’s Market Summarised

Nifty had a great session today if you look just at the closing numbers. But once you look at the charts, it becomes a very interesting story.

The index opened with a gap-up above 14,100 but struggled to sustain. After consolidating heavily, the index saw a huge fall around 11 am, backed by the fall in Bank Nifty. Support was taken at 13,950, and flew back up 195 points to create a new record-high. Nifty closed the day at 14,132, up 114 points or 0.82%.

Bank Nifty opened the day above 31,430 and consolidated in that range. The fall just before noon was sharp and swiftly brought down Nifty as well. The index took support at 30,900, and went back up. Unlike Nifty, the index of banks was unable to create a fresh day-high. Bank Nifty closed the day at 31,212, down 13 points or 0.04%.

Every major sector except Bank Nifty closed in the green today. Metals and IT sectors were the top-performing in the day.

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

News Picks

Shares of Tata Steel went up by more than 7.7% after the transaction involving the transfer of stake in processing arms to Tata Steel Downstream Product was completed. This was discussed in our pre-market report, here.

There was also a lot of positivity in the metal sector after Jindal Steel and Power Ltd(JSPL) on Monday posted a record 30% increase in its standalone production and 25 per cent growth in sales during December 2020. JSPL went up by more than 6.5%, while Hindalco was up by 6.7%. Jindal Steel went up by 6.50%.

Shares of Cholamandalam Investment and Finance Company(Cholafin) went up by more than 7.7% after the commercial vehicles auto sales data for December showed promising numbers.

As we talked about yesterday, Ashok Leyland Ltd reported an overall sales growth of 14% YoY at 12,762 units in December 2020. Share prices of the company went up by 5%.

The rally in auto and auto ancillary stocks has taken the Auto index to 2-year highs. Do not forget that this is in between a global economic slowdown!

Shares of Marico closed more than 2.5% after the company gave positive remarks in its quarterly update. “Faster than expected recovery seen in consumer sentiment in India. Witnessed strong performance across its portfolio. General trade continues to grow healthily and rural markets are staying ahead of urban. E-commerce continued to do well”.

Shares of IT companies rocketed throughout the day, with all but one company from the sector posting gains. COFORGE was up 4.3%, while TCS closed up 3.8%. Many IT companies have touched their 52-week highs today.

With the farmers protests drawing more and more mainstream attention, Reliance has come out with a statement defending itself saying that the company has nothing to do with the farm laws, nor with contract farming. Investor sentiments remained muted, with the stock remaining flat.

Shares of ZEEL fell more than 2.5% after the Income Tax Department raided 15 offices of the company.

Markets Ahead

While the rally in steel stocks after the JSPL sales data was not much expected, IT stocks rally was very much predictable. We had written an in-depth article about top IT companies and there expected performances in Q3, here. Auto stocks rally was also easy to catch.

I am sure that once the FII/DII data comes, there will be a considerable investment by the FIIs today. Such was the recovery in Nifty, after the intraday fall.

With markets closing at fresh highs, NIFTY has now formed a green candle in the last 9 trading days. The index has gained more than 1,000 points since the December 21st fall. Such is the power of a bull market!

Gold prices are also increasing after the US stimulus announcement resulted in a weakened dollar.

Hope you will all tune in to The Stock Market Show tonight. Keep watching this space for more.