Markets extend rally; 9,400 crucial for Nifty

Mumbai: The markets extended gains on the back of solid gains in financial stocks, as hopes of easing lockdown and a likely fiscal package lifted the market sentiment. The BSE benchmark index, the Sensex, touched a high of 32,200, and ended with a gain of 371 points at 32,115.

Banking and financial shares once again are the top gainers. Among the Sensex 30 stocks, IndusInd Bank zoomed over 15 per cent despite dis-appointment on the earnings front. Lending majors – Bajaj Finance and HDFC soared 9 per cent and 7.7 per cent, respectively. 

Axis Bank also posted a solid gain of 6.6 per cent ahead of its earnings today. Later in the day, the bank reported Q4 loss of Rs. 1,388 crore and a 3-fold rise in provisions in the backdrop of Corona virus after effect. ICICI Bank, SBI and Kotak Bank were the other major gainers.

On the flip side, Pharma shares witnessed profit-taking across the board. The lone Pharma share in Sensex 30, Sun Pharma, was the top loser – down 3.3 per cent. HCL Technologies, Nestle, NTPC, Bharti Airtel and Bajaj Auto were the other major losers.

Among sectors, the BSE Bankex and Finance indices rallied over 3 per cent each. The Consumer Durables index was up 1.8 per cent. On the negative front, the Healthcare and Telecom indices declined around 1.5 per cent each, while the FMCG index shed a per cent.

The market breadth was once again neutral, with 1,284 advancing shares versus 1,085 declining stocks on the BSE. each. On Tuesday, 31 stocks registered a fresh 52-week high, while 90 stocks touched a new 52-week low.

Going into trade on Wednesday, the Sensex seems to have entered overbought territory, hence some caution needs to be advised at higher levels. As per the daily Fibonacci charts, in case of further up move the BSE Sensex may face resistance around 32,320-32,385-32,450, while in case of a downside the index may seek support around 31,910-31,845-31,780.

The NSE Nifty had been facing resistance around the 9,390-level, the 38.2 per cent retracement level of the recent major fall for the last three trading sessions. The index today briefly crossed the 9,400-mark, but eventually ended a shade below the resistance level at 9,381 – up over a per cent for the day.

On Wednesday, if global cues remain supportive the Nifty may attempt to break past the 9,400 barrier and test the higher end of the daily chart Bollinger Band at 9,600-odd levels. However, failure to sustain above 9,400-level could see the index drift back to 8,900-odd level.

Among key momentum oscillators, the MACD (Moving Average Convergence Divergence) is in favour of the bulls, while the Slow Stochastic is showing signs of tiredness. The 14-day RSI (Relative Strength Index) and the Directional Index continue to remain in neutral mode.

Disclaimer: The article is for information purpose only and does not advocate any buy or sell recommendation.