Domestic equity markets broke the eight-day losing streak on Wednesday as benchmark indices settled with sharp gains at the end on the back of strong global cues. Positive data over manufacturing, services and home sales boosted the investors’ morale, pushing the bull higher.
At the domestic level, India’s manufacturing activity continued to maintain growth momentum in February as shown by the Manufacturing Purchasing Managers’ Index. Moody’s Investors Service raised India’s economic growth estimate for 2023 to 5.5 per cent from 4.8 per cent also added to the momentum of the markets.
For the day, the 30-share pack BSE Sensex surged 448.96 points, or 0.76 per cent, to 59,411.08. NSE’s Nifty50 jumped about 147 points, or 0.87 per cent, to 17,450.90. Broader markets outperformed the headline peers as BSE midcap and smallcap indices rose more than a per cent each. Fear gauge India VIX plunged more than 7 per cent to just slip below 13-level.
“The Nifty has managed to close in the positive after falling for nine consecutive trading sessions. We believe that Nifty is oversold and the pullback can continue over the next few trading sessions. On the hourly charts Nifty has broken out of a falling channel which suggests that the Nifty is in a counter trend pullback,” said Jatin Gedia, Technical Research Analyst, Sharekhan by BNP Paribas.
The pullback, if any, is likely to be just a relief rally and thus we change our outlook on the Nifty to sideways. The range of consolidation is likely to be 17,700 – 17,200. In terms of levels, 17,340 – 17,300 shall act as a crucial support zone while 17,550 – 17,600 is the immediate hurdle zone for Nifty, he said.
All the sectors of Nifty settled with decent gains during the session. Nifty Metal index surged about 4 per cent, followed by a 3 per cent rise in PSU Bank Index. Nifty Media Index gained about 2 per cent, whereas Auto, Private lenders and IT indices rose about a per cent, each.
Among the Adani Group stocks, Adani Enterprises rallied 15 per cent, whereas NDTV, Adani Power, Adani Transmission, Adani Green Energy, Adani Total Gas and Adani Wilmar hit an upper circuit of 5 per cent each. Ambuja Cement rose over 3 per cent, whereas Adani Ports and ACC were up by 2 per cent each.
Barring Adani Enterprises, Hindalco rallied about 4 per cent, leading the gainers in the Nifty50 pack. UPL and State Bank of India surged 3 per cent each, whereas IndusInd Bank, Axis Bank, Tech Mahindra, Tata Consultancy Services and ONGC rose over 2 per cent each.
Only five Nifty stocks ended the day in red. Britannia and Power Grid dropped 2 per cent, each, whereas Cipla shed about a per cent. Bharat Petroleum and HDFC Bank were other laggards on the pack.
A total of 3,626 shares were traded on BSE on Wednesday, of which 2,446 settled lowers. 1,050 stocks ended the session with gains, while 130 shares remained unchanged. 207 shares hit their upper circuit today, whereas 146 tested the lower circuit levels for the day.
The Indian market was oversold and needed encouraging domestic triggers to show signs of revival, said Vinod Nair, Head of Research at Geojit Financial Services.
“The manufacturing PMI reported was better than predicted at 55.3, even though India’s Q3 FY23 GDP statistics came in slightly below expectations. Solid global markets, bolstered by strong Chinese manufacturing data, also ignited optimism in the domestic market,” he said.
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In the broader markets, Indo Amines rallied over 19 per cent. Rupa & Company and Dollar Industries surged 16 per cent and 13 per cent, respectively, ahead of summers. Alok Textiles also gained over 13 per cent, whereas Carysil rose 11 per cent during the day.
On the other hand, SVP Global, Sintex Plastics, Anup Engineering and Tanfac Industries hit a lower circuit of 5 per cent each. Windlas Biotech, Vishnu Chemicals and KDDL shed up to 4 per cent, each.
