Overcoming a sluggish start, Indian stock markets finished strong today, with gains of more than 1%. The NSE Nifty 50 index closed 1.24% higher at 10,430.05 while the benchmark S&P BSE Sensex ended up about 500 points at 35,414.45, after recording their best quarter in 11 years. The Nifty had closed the June quarter up 19.8% and the Sensex 18.5%, after hitting a four-year low in March.
Today the investor sentiment supported was supported by a survey showed that domestic manufacturing activity contracted at a slower pace in June. Top mortgage lender HDFC Ltd jumped 4.6% on its best day in a month, while private-sector lender Axis Bank Ltd led gains in percentage terms with a 6.5% rise.
Stocks of lenders were the biggest boost to the index, with the Nifty Bank Index, which has tumbled more than 30% so far this year, closing up 2.8%.
Also improving the sentiment, the government today approved a scheme to improve the liquidity position of NBFCs/HFCs through a special purpose vehicle (SPV) to avoid any potential systemic risks to the financial sector.
Coronavirus cases in India, however, continued to rise rapidly, jumping by more than 18,000 to 585,493, including 17,400 deaths.
Here is what analysts said on today’s market performance:
Deepak Jasani, Head Retail Research, HDFC Securities
“Indian benchmark indices ended higher encouraged by the positive PMI Manufacturing data. India’s Manufacturing PMI (seasonally adjusted) staged a partial recovery in June, coming in at 47.2, after posting anemic readings in May (30.8) and April (27.4). This improvement mirrors the modest relaxations of the nationwide lockdown that were implemented in June.
“SBI Caps has set up a Special Purpose Vehicle (SPV) to purchase short-term paper from eligible NBFCs and HFCs who shall utilise the proceeds under this scheme only to extinguish existing liabilities. SPV will buy investment grade Commercial Papers and NCDs with residual maturity of not more than three months. Purchases will be made only till September 2020. This late afternoon announcement will help sentiments towards the financial sector.”
“Technically the Nifty broke out of the range trade over the past three sessions and is now headed towards 10553. On dips 10338 could provide support.”
Sahaj Agrawal, Head of Research- Derivatives at Kotak Securities
“Nifty has been consolidating for the past few sessions. Nifty has now formed a strong support at 10250; only a breach of the same is expected to invite selling pressure.”
Ajit Mishra, VP – Research, Religare Broking Ltd.
“Again, it’s the buoyancy of the global markets which aided surge amidst rising cases in India. Besides, though we’re seeing demand revival in select areas, it is still way lower compared to pre-COVID levels. Amid the mixed signals, we feel the upside could remain capped and traders should continue with positive yet cautious stance. We reiterate that the performance of the banking pack would play a critical role in the next directional move as other sectors, by and large, have done their part.”
Manish Hathiramani, Index Trader and Technical Analyst, Deen Dayal Investments
“The market was a tad shy of the 10450 levels and went to 10447. If we manage to cross today’s high tomorrow, we should be in bull territory and the markets would attempt a new high – 10,700. The new support would now be 10250.”
Vishal Wagh, Research Head, Bonanza Portfolio
“Nifty opened flattish on the back of the mixed bag global market and witnessed consistent buying post first half an hour. Nifty managed to cut a hurdle of 10410 and close above it at 10430. Going forward, major support will be seen around 10220 and Resistance will be 10550.”