Auto stocks and hope on dstreet pulls Sensex up by 300 points

Source :IANS
Author :IANS
Last Updated: Wed, Oct 7th, 2020, 19:25:47hrs
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Mumbai: Broadly positive global cues, along with likelihood of a stimulus package and hopes of healthy quarterly Q2 results, pushed the Indian equity markets higher on Wednesday.

Both the key indices, the S&P BSE Sensex and the NSE Nifty50, made healthy gains during the day's trade session.

Buying was witnessed in auto, FMCG and IT indices, whereas media, realty, metals, pharma and energy indices ended lower.

Globally, Asian markets ended the day's trade on a positive note as investors shrugged off US President Donald Trump's abrupt cancellation of negotiations on a new coronavirus relief bill and lower commodity prices.

He later tweeted about his willing to pass several independent stimulus measures, including a new round of stimulus cheques.

Consequently, the S&P BSE Banking index closed at 39,878.95, higher by 304.38 points, or 0.77 per cent, from its previous close.

The Nifty50, on the National Stock Exchange, traded at 11,738.85, higher by 76.45 points, or 0.66 per cent, from its previous close.

"After the initial gains, Nifty failed to rise materially post 10.30 a.m. suggesting sector and stock rotation," said Deepak Jasani, Head of Retail Research at HDFC Securities.

"A negative advance decline ratio also suggested partial profit taking by investors. The next resistance for the Nifty continues to be at 11,782 points."

"Reliance Industries ended 2.2 per cent higher with large volumes while Vedanta fell 11.3 per cent with large volumes even as the delisting offer by its promoters closes on Oct 9."

According to Ruchit Jain, Senior Analyst - Technical and Derivatives, Angel Broking: "Our markets have continued with the ongoing momentum to add more gains to the recent rally. This week, the index heavyweights have led the charge one by one wherein the IT giants took the lead on Monday, HDFC twins on Tuesday and today the heavyweight Reliance propelled the index higher."

"However, the market breadth showed a bit divergence today as the number of stocks declining outnumbered the advances. The over bought momentum readings on the lower time frame chart and divergence in the broader markets indicates stock specific action and thus, traders should be selective in stock picking."

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