Today’s Market Summarised
With the RBI Governor’s surprise press-conference, Nifty closes at the day’s high after a day of highly volatile consolidation.
Nifty opened the day at 14,608 with a more than 100-point gap-up. It was a very volatile start, but stabilised before noon. Even with this, there were random selling zones across the whole market as you can see from the red candles. Nifty still crossed all the day’s levels and closed near the high at 14,617, up by 121 points or 0.84%.
Bank Nifty opened at 32,600 and was volatile just like other indices. When the RBI Governor’s press conference started at 10 am, the index fell 470 points in a single minute. Yes, in a single minute it almost broke the 32,000 support. This fall was quickly recovered and the index moved up well afternoon. Bank Nifty closed the day at 32,783, up 513 points or 1.59%
All sectoral indices except Nifty Realty(down 1%) closed in the green. Nifty Pharma(up 4%), and Nifty IT(up 1.2%) were the highlights of the day.
Asian markets remained mixed, with many including Japan and China still being closed. European markets are all trading in the green.
News Picks
The lockdown in India’s most populated state, Uttar Pradesh, has been extended till May 10th.
UK new car registrations posted a 30-fold increase to around 141,000 vehicles in April 2021. But this data is obviously very confusing as last April had very low sales due to lockdowns.
Jaguar Land Rover’s April total sales in UK was reported at 8,367 units vs 18,966 units last month. Parent company Tata Motors still managed to close 0.7% up.
Indigo has reduced its number of flights to 700 from 1,200 flights in February. The stock closed more than 2% up, as the company’s Board will meet on May 7 to discuss raising funds through QIP.
The RBI Governor announced additional liquidity to key sectors participating in tackling the crisis. With this, all healthcare stocks including Pharma, Laboratories and Hospitals shot up in the day. Nifty Pharma closed 4% up.
RBI will give Rs 50,000 crore in liquidity to key sectors. Banks can provide fresh loans to pathology labs, oxygen suppliers, vaccine makers and hospitals under the priority-sector classification.
Many Pharma stocks including Lupin(up 13.47%), Auropharma(up 6.4%), and SunPharma(up 5.9%) hit multi-year highs. Hospital stocks including Apollo Hospitals(up 4.5%), AsterDM(up 7%) and Fortis(up 2.3%) also benefitted.
News related to cabinet considering IDBI strategic divestment proposal gave some boost and IDBI Bank is up by 4.4%. Funny how every time these rumours happen, the stock moves up.
Adani Enterprises announced their Q4 consolidated net profit at Rs 234 crores, up 282% YoY. But compared to last quarter, profits are down 21%. Board has approved raising funds of Rs 2,500 crore.
Shares of CEAT remained flat even as they posted Q4 consolidated net profit at Rs 153 crores, up 300% YoY. All tyre stocks have already rallied so much in expectation of good sales.
Heavy profit booking kicked into Adani Ports after Q4 results and stock is down by nearly 4%. They are also trying hard to avoid sanctions by the US Government after allegedly striking a deal with the Myanmar Military.
Many Banking stocks also jumped into the Nifty 50 top gainer list after the RBI announcement with a second round of loan restructuring for individuals and MSME industries.
Many fertilizer stocks including UPL, Pi Industries, RCF, Rallis and more ended with good gains in the day.
BHEL gained nearly 8% in the day to gain nearly 30% from April 19th or 20% in the last 5 days. Shares of BEL also gained 4%.
Godrej Properties extended fall after poor Q4 results, down 4.7% in the day.
Tata Steel closed flat, with market anticipating good results from the company which has rallied 151% in the last 6 months.
Markets Ahead
The RBI Governor’s announcements were taken positively by the market, including liquidity boost to healthcare and small finance banks. The moratorium/restructuring announcement was received well by Bank Nifty. More so, his assurance that RBI will take all means necessary to keep the market stable gave some confidence.
Only five Nifty 50 stocks ended in red.
As we discussed here yesterday, the fall in Bank Nifty was not extraordinary yesterday. That is why it was not surprising to see the index move back up.
Even though it was a day where Nifty closed in green, it was with many huge red candles across the whole day. This could have irritated many traders with the market easily covering up these red candles and moving up further.
Looking forward to Tata Steel’s profit numbers this quarter to see if the steel rally will continue power. You can check out this article to read why these stocks have rallied.
Even with the positiveness, Nifty and Bank Nifty could not break yesterday’s high. So it can be called just a day of consolidation. But the strong closing near the end could lead to a gap-up opening in the market tomorrow if global cues remain positive. 14,750 will have to be watched if Nifty is moving up, with good support at 14,500. The highest chance is that market will close in this range.
Bank Nifty still is yet to cross 33,000 and this will be a good level to watch tomorrow if market does not open with a huge gap-up. 33,220 and 33,450 can also be watched as resistance levels. And as support, 32,000 remains strong for the week as we have discussed multiple times.
Stay safe, stay home if you can. Keep looking at charts and improve your skills.
Catch you all on The Stock Market Show tonight!
