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Stock Market Update: Market Ends With Gains, Sensex at 59,005, Nifty at 17,565

The key benchmark indices such as BSE Sensex on Tuesday closed at 59,005.27, up 514.34 up 0.88 percent while the blue chip Nifty 50 was trading at 17,565.15, up 168.25, or 0.97 per cent. On BSE, IDBI, HSCL, Gujarat Narmada Fertilizers Ltd were the top gainers on BSE while RPSG Ventures, Reliance Infra, Jai Prakash Associates were among the laggards. However, on NSE, JSWSteel, Bajaj Finance, IndusInd Bank, Tata Steel, ONGC were the top gainers. On the flip side, Maruti, BPCL, Hero Moto Corp, Bajaj Auto, Nestle India were the top losers. Sectorally, at closing, barring Nifty Auto, Nifty PSU Banks, Nifty Consumer Durable, all indices were trading in the green. Nifty Metal was the top gainer. On BSE,  BSE Midcap closed with the gain of 0.79 per cent and BSE SmallCap closed with the gain of 0.14 per cent.

“Today’s recovery in equities shows that markets have discounted possible fallout from the likely default of Chinese real estate giant Evergrande, while Thursday would be crucial as US$83mn interest payment is due for Evergrande on the day. However, considering increasing possibility of earnings downgrade in the USA markets following sharp rise in Coronavirus daily caseload and continued reform measures undertaken by the government in India appear to have revived FIIs’ interest in the domestic market. An inflow of over Rs65bn in the last week from FIIs vindicates this,” Binod Modi, head strategy at Reliance Securities said.

“Additionally, we continue to believe that high frequency key economic indicators for Aug ’21 in the form of GST collection, railway freight, auto sales volume despite semiconductor issues, power consumption, import-export data and fuel volumes indicate a sustained economic recovery on YoY comparison,” Modi added.

The correction in the market on Monday can be attributed to the meltdown in the shares of Evergrande, one of the biggest property developers in China. China’s second largest realtor Evergrande is likely to default on a $83.5 million interest due on its loans to banks. The company’s last recorded debt stood at close to $300 billion that included all its bank loans, short-term borrowings and supplier credit. Just a little over half of it, 54 per cent, is secured i.e. the banks have assets as collateral against the amount. In the backdrop of the meltdown in Evergrande, markets across the world seemed  nervous. Even markets in Europe saw their sharpest fall in two months based on the fear’s emanating from Evergande’s collapse. 

“Sharp recovery has been witnessed from a good support zone as mentioned and closed a day at 17562 with gains of one percent and formed a bullish candle on the daily chart after two bearish candles. Now going forwards 17600-17660 will act as resistance zone also one can lock their long gains around said levels and supports are placed at 17500-17430 zone any dip near said levels will be again buying opportunity with keeping immediate stop out level below 17500 zone and overall range is coming in between 17300-17800 zone,” Rohit Singre, senior technical analyst at LKP Securities said.

In early trade, the Indian market started the Tuesday session in the green , despite weak global cues. Nifty opened at 17,450 and Sensex above 58,600 levels on Tuesday. The BSE Sensex gained near 140 points or 0.24 per cent to 58,630, while Nifty50 grew over 53 points or 0.31 per cent to 17,450.5 levels on Tuesday. While in the broader markets, Mid-cap Index also opened positive by almost 35 points or 0.12 per cent to 29289.7 levels today at the market open.

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