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Sensex ends 276 points higher, Nifty at 11,503; IT, pharma stocks outperform

Domestic markets also traded buoyed today backed by the announcement by the Ministry of Home Affairs (MHA), on Unlock 5.0 guidelines, further relaxing curbs on activities outside of containment zones

Rupa Burman Roy | October 5, 2020 | Updated 17:25 IST
Sensex ends 276 points higher, Nifty at 11,503; IT, pharma stocks outperform
On the currency front, the Indian rupee depreciated by 16 paise to close at 73.29 per US dollar on Monday even as the domestic equity market was trading with significant gains

Market indices ended on a bullish note on Monday powered by gains in financial and technology stocks amid positive cues from global markets. Extending gains for the third straight session, the 30-share benchmark Sensex ended 276 points higher to 38,973 and Nifty gained by 86 points to 11,503. On Friday, Sensex gained 629 points to 38,697 and Nifty ended 169 points higher to 11,416.

On the sectoral front, almost all indices closed in the green territory, barring media, auto and PSU Bank index that ended marginally bearish. IT index gained the most, rising over 3.5%, followed by over 2.5% rise in metal and almost 2% gain in pharma. IndusInd Bank, TCS, Tata Steel, ICICI Bank, Infosys and Axis Bank were among the top gainers on the Sensex chart, surging as much as 5%

Domestic markets also traded buoyed today backed by the announcement by the Ministry of Home Affairs (MHA), on Unlock 5.0 guidelines, further relaxing curbs on activities outside of containment zones. Under these set of guidelines, cinemas, theatres, multiplexes have been permitted to open with 50% seating from October 15.

Vinod Nair, Head of Research at Geojit Financial Services said, "Indian indices had a very positive start taking cues from the global market and in anticipation of the Supreme Court verdict of the compounding of loans during the moratorium period. Gains came off when the decision was deferred to next week, this delay is unlikely to change the framework for small borrowers and the banking sector as the government & RBI is expected to maintain the buoyancy of the matter. In the near-term, the market is expected to maintain its optimism based on Trump's recovery, development of stimulus in US & India, upcoming Q2FY21 results in India and Supreme Court final verdict."

S Ranganathan, Head of Research at LKP Securities said,"Markets opened firmly in the Green with TCS buoyed by the buyback news leading the charge ahead of its earnings and well supported by the IT sector today. Selective Stocks in Pharma & Textiles witnessed buying interest from Smart Investors even as Indices gave up some gains in late afternoon trade today".

Asian markets are trading positive taking cues from US futures that turned positive as investors watched for developments on US President Donald Trump's health after he tested positive for the coronavirus last week.

European markets opened almost 1% although weakness persisted post news of Trump testing positive for Covid-19.

US stock futures, were gaining momentum following news from White House on Trump's improving health and rose on expectations that Trump will leave hospital soon. Australian markets gained. Markets in China were closed witn negative bias due to holiday.  

Wall Street last Friday closed lower after news of US President testing positive for COVID-19, added uncertainty about the upcoming 2020 elections.

Ajit Mishra, VP - Research, Religare Broking said," Markets started the week on optimistic note led by supportive global cues. The news reports that the US President is recovering well, aided market sentiments. "

"Global cues were positive as Dow Futures, Nasdaq Futures and FTSE were up by 0.53%, 0.96% and 0.62% respectively," said Keshav Lahoti Associate Equity Analyst, Angel Broking.

Investors also turned optimistic following news of Moderna's experimental Covid-19 vaccine appearing safe and showing signs of working in older adults, as per study results published in the New England Journal of Medicine. However, as per reports, Moderna's vaccine won't be ready before the November election.

Worldwide, there were 354 lakh confirmed cases and 10.41 lakh deaths from COVID-19 outbreak. India's COVID-19 caseload breached the 66-lakh mark and the death toll from COVID-19 infections rose to 10.2 lakh, as of today.

Technical outlook

Ajit Mishra, VP - Research, Religare Broking said," Markets are closely following global events and the upcoming earnings season would further add to the volatility. We suggest maintaining a positive yet cautious approach and giving preferring to index majors. Nifty has the next hurdle at 11,600."

As per Geojit Financial Services, the 11400-500 region looks to be a volatile zone, but favoured view expects Nifty to spend very little time inside this region. 11800 appears fairly achievable, as long as dips do not slip beyond 11327.

Aamar Deo Singh, Head Advisory, Angel Broking said," Overall, Nifty has been displaying bullish momentum over past few trading sessions, with key resistance seen around the 11600-11650 zone whereas immediate support is seen around 11200-11250 levels."

Rupee

On the currency front, the Indian rupee depreciated by 16 paise to close at 73.29 per US dollar on Monday even as the domestic equity market was trading with significant gains. On Thursday, the rupee had closed 63 paise higher at 73.13 per dollar.

On rupee's outlook, Vaqarjaved Khan - Research Analyst, Angel Broking said, "In the week gone by, Indian rupee depreciated by 0.62 per cent and currently stands at 73.32 against the US dollar. S&P ratings are expecting India's economy to contract by 9 per cent in FY21 due to Covid-19 crisis as well as weakening fiscal position will constrain the Government's ability to support the ailing Indian economy. The House has approved a $2.2 trillion Democratic coronavirus stimulus plan despite reluctance in a deal between Democrats and the Republicans. However, the deal is unlikely to be passed in the Senate where Republicans hold the majority and are unlikely to become a law in the coming time. Also, non-farm payroll data from the US came in at 661K against expectations of 900K.

He added," With second stimulus package unlikely to pass, USDINR (CMP: 73.13) is likely to move in the range from 72.5 mark at the lower end of the spectrum and 74 mark at the higher end. (5th Oct-9th Oct 2020)."

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