MUMBAI: Benchmark equity indices ended higher for the fourth successive session today reflecting investor confidence that the impact of the ongoing second COVID-19 wave on the economy and corporate earnings will be minimal.
Investors are betting on the surge in COVID infections to hit their peak in the coming weeks, which has led to the belief that restrictions currently in place across several states in the country could start to ease by the end of May or in June.
Furthermore, investors are also hopeful that the BJP may secure a majority in the ongoing assembly elections in West Bengal where the party is looking to form its first ever government. The state election will provide a sentiment check on the ruling party at the Center given the ire it has drawn for its handling of the pandemic.
For the day, Nifty50 ended 0.2 per cent, or 35.4 points, higher at 14,894.9, while Sensex closed at 49,765.9, up 0.1 per cent or 32.10 points.
Here are the major movers in today’s session:
Steel stocks continue bull run
Shares of steel companies surged after media reports said the Chinese government is set to withdraw rebates it gives to its steel manufacturers for exports. The move is expected to lead to a surge in export steel prices in China and will open up the world’s largest market to foreign players. Shares of Tata Steel, JSW Steel and Jindal Steel ended 6-10 per cent higher.
RIL rises on Aramco deal news
Shares of industries rose for the third consecutive session after Financial Times on Wednesday reported that Saudi Aramco is in talks with the company for a part cash and part share deal for acquiring 20 per cent stake in RIL’s energy business.
Inox Leisure sags on weak earnings
Shares of Inox Leisure ended 1 per cent lower after the company reported another quarter of weak earnings. The theatre chain owner’s net loss in the March quarter widened to Rs 121 crore from Rs 21.3 crore a year ago. The company’s revenues plummeted 76 per cent to Rs 90.4 crore.
What gave buy signal?
As many as 75 stocks listed on the National Stock Exchange gave buy signals based on MACD indicators. Names included Tata Motors, BHEL, Hindalco Industries, Bandhan Bank, and Bank of India.
What’s ahead for the markets?
Traders bought most out-of-money call options of Nifty50 ahead of the outcome of West Bengal exit polls later today suggesting that they are likely betting on BJP to score a majority in the state election. In the future segment, traders added long positions in May contract of the index as Open Interest surged 36 per cent.
“We might see further consolidation after the recent up move. However, the bias would remain on the positive side. Meanwhile, we suggest using dips to add quality stocks from banking, pharma and metal space,” said Ajit Mishra, vice president of research at Religare Broking.