Today’s Market Summarised

Nifty had a very range bound session today. With high hopes riding on HDFC Bank, the stock failed to perform and the Nifty 50 saw very limited movement, as a result. But as we know, even when Nifty remained flat, individual stocks gave great movement.

Nifty opened the day at 11,879 with a gap-up and moved down to take support at 11,820. After going up, the index took resistance near 11,900. Nifty traded between this 70-80 point range for the whole day. The index closed the day at 11,873.05, up 110.60 points or 0.94%. Even with this seemingly big gain, Nifty formed a red candle in its daily chart because of the gap-up opening.

Bank Nifty opened the day just above 23,806 with a big gap-up thanks to HDFC Bank’s (Bank Nifty’s biggest constituent) positive profit growth in Q2 for FY21. But what happened after this was truly surprising. While HDFC Bank strongly fell from its opening level while Bank Nifty took support at 23,750 and kept moving up. After easily breaking the resistance at 24,000, the index went up the whole day and touched a high of 24,320. Bank Nifty closed the day at 24,323, up 699 points or 2.97%. 3 out of 5 top gainers in Nifty were members of Nifty Bank today.

The top gaining sector of the day was unsurprisingly Nifty Bank, and even while HDFC Bank under-performed, the index of banks went up. Nifty Pharma pulled the markets down, and bearish sentiments are forming in Nifty Auto. 

While Asian markets closed with gains mostly, European markets are trading flat.

News Picks

HDFC Bank was the big shocker of the day.The stock failed to perform, and with Bank Nifty going up and up, I thought it would go up too. But even though the stock closed in green, it traded very flat after 12 noon. After opening with a gap-up, HDFC Bank closed the day at Rs 1,203, up 0.3%.

Although the son failed to move, the parent company HDFC moved quite a bit today. It led the charge for the NBFC rally and closed the day at Rs 2,033.25, up 3.65%. 

Jet Airways stock continued its upper circuit to upper circuit journey today after announcement of new owners under Kalrock-Jalan Joint Venture. Kalrock is also said to be infusing Rs 1,000 crores for the revival of the debt-ridden airline.

Share prices of cement company ACC stayed very volatile today during market hours. With some late stage buying, the stock jumped to close in green for the day. After market hours, the Q3 CY21 (CY is calendar year, and since ACC’s parent company is Swiss, it follows international standards. Q3 CY21 is the same as Q2 FY 21 in India) results of the company were announced with a net profit at Rs 363.8 crore, a 20.2% year-on-year growth. While revenue remained flat, the company was able to increase its margins by a lot.

The Central Government of India is going full steam ahead with its divestment plans for PSUs. As we know, governments are running out of cash as Covid-19 pandemic increased expenses and reduces tax income. The Department of Investment and Public Asset Management (DIPAM) has announced many divestment plans for PSUs, also saying that the BPCL stake sale will be completed before April. IPOs are being planned for many companies, along with buyback plans for others. DIPAM secretary said that this FY year, the government is planning 8 – 9 buybacks.

Nestle India performed well today in expectation of good results. Share prices closed at Rs 16,119.95, up 4.47%.

Kalyan Jewellers’ Rs 1,750 crores IPO has been approved by SEBI.

Tyre stocks performed well today. CEAT Tyres jumped the most and closed at Rs 1,050, up 5.85%.

Markets Ahead

Markets are expected to be range bound in the coming days of the week as well. With the US elections coming soon, markets will be volatile in the last week of October. So Nifty is probably taking a break today. With Reliance and HDFC Bank still underperforming, any big movements in these counters can a create a movement in Nifty.

The red candle formed by Nifty does not give me any confidence at all, but I’m not yet bearish. Hoping for a range-bound market so that my option strategies work well.

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