Today’s Market Summarised

Nifty opened the day with a gap-up at 14,782 and tried to move down. Support was taken at 14,650, and the index could not even reach yesterday’s lows. With a lot of confidence, Nifty moved up 200 points in one hour but fell soon and consolidated. Nifty closed the day at 14,707, up 32 points or 0.22%. 

Bank Nifty closed in the red today unlike Nifty. After opening with a gap-up at 35,554, the index moved down pulling Nifty as well. It went back up breaking the opening range but could not sustain. Over the day it slowly came down and even broke yesterday’s low. Support was taken at 35,000. But mainly the index consolidated. Bank Nifty closed the day at 35,116, down 140 points or 0.40%. Expecting HDFC Bank and Kotak Bank to support the index tomorrow.

Metals again shot up, with a gain of 3.89% in the Nifty Metal Index. Nifty Realty gained 2.7% after falling yesterday. No other sectoral index gained/lost more than 1% today.

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

News Picks

Shares of UPL opened with a gap-down after news of a fire at the company’s Gujarat plant. But share prices showed no negative reaction, closing nearly 5% up in the day.

Metal stocks jumped up sharply in the day. First hoping everyone caught today’s rally in metal stocks. Iron-ore prices have reached a nearly 10-year high on the global markets. Tata Steel closed as the top gainer in Nifty 50 today gaining more than 6.5%. SAIL(up 6.54%), Hindalco(up 5.36%) and Jindal Steel(up 4.74%) are other notable movements.

In fact, commodity prices all over the world have been hitting multi-year highs. Hindustan Copper from yesterday has again closed 18% up today.

Shares of Cochin Shipyard jumped nearly 8% in the day after receiving a Rs 10,000 crore order from the Indian Navy. Just a reminder that the market capitalization of the company is not even half the size of this order, at Rs 4,600 crore.

Shares of Page Industries, maker of Jockey, went up more than 5% after appointing V S Ganesh as CEO.

Tata Motors jumped 6.4% up with 300 being strong support for the stock, and the company expecting to grab 10% market share in India soon. Micro-SUV codenamed Hornbill is expected to push up the company’s sales by the end of next financial year. Shares of Maruti fell 1.64%.

Petrol pricing has gone up again, and Union Petroleum Minister has pointed out international price variations as the reason. Shares of oil and gas companies went up in the day, including that of manufacturers, refiners and sellers. Reliance shares closed nearly 1% up. ONGC, BPCL, HPCL, IOC shares gained.

Yesterday’s gainers Kotak Bank, HDFC Bank and Adani Ports corrected today and featured in Nifty 50’s top losers.

Bharti Airtel has tied up with global chipmaker Qualcomm for rollout of its 5G network in India. Interestingly, Reliance Industries had last year raised about $97 million(nearly Rs 700 crore) from Qualcomm’s investment arm for Jio.

With the rupee strengthening more against the dollar, IT and Pharma stocks remained weak in the day. IT had contributed to Nifty’s quick rally till 14,850 today but cooled down over the day.

With Nifty consolidating, the Nifty Midcap 50 index gained 1.46% led by Apollo Hospitals and Page Industries. Nifty Smallcap 100 also gained nearly 1%.

Markets Ahead

Markets have consolidated today, with Nifty comfortably trading between yesterday’s large ranges. To be honest, when markets closed yesterday, I was expecting another bloodbath today before reversing on Thursday. But when Dow Jones hit its all-time highs after midnight, I had some hope that today might not be as bad as yesterday.

But again I see this as a pullback and will be watching out for today’s high in the coming trading sessions as resistance. Bullish position only when Nifty closes above 15,100.

Interestingly European markets are all in the red. Let’s keep an eye out for how the US Markets close tonight.

Yesterday’s low continues to be the support, and if broken may see Nifty touching 14,500 as we discussed yesterday.

US Stimulus will get passed by the House this week, a point which we discussed could trigger a rally in global markets. It is expected to come into effect within 3 weeks. The global rally in commodities is also taking the shine off of equity markets, but again this is just a short term phenomenon until institutions reshuffle portfolios.

Looking forward to good trading opportunities in the upcoming sessions. Also do note that day after tomorrow is the weekly and monthly expiry for stock and index options. Expecting violent consolidation.

Catch you all on The Stock Market Show tonight!