Benchmark indices ended on a bullish note on Tuesday despite muted global equities following reports that PM Narendra Modi would meet FM Nirmala Sitharaman at 6:30 pm to discuss stimulus package. The positive sentiment in market was also fuelled by hopes of higher foreign inflows into local markets after MSCI said it would revise its global indexes to reflect changes in the country's foreign ownership limits.
MSCI said it would will implement changes in foreign ownership limits (FOL) in the MSCI global indexes containing Indian securities in November.
Subsequently, Sensex closed 376 points higher at 40,522 and Nifty gained 121 points to 11,889.
Kotak Bank, NTPC, Nestle India, Asian Paints, Tech Mahindra and M&M were among the top gainers. On the other hand, IndusInd Bank, followed by ICICI Bank, ONGC, SBI, HDFC, Infosys and Reliance Industries were among the top losers on Sensex.
Except IT, realty and PSU Banks, all the other sectoral indices closed higher today, with over 3% gain in private banking and a 2.8% rise in bank Nifty and 2.1% gain in financial services.
The domestic market opened in the red but turned green after media reports said that FM Sitharaman is scheduled to meet Prime Minister Narendra Modi today to review the state of the economy and the need for another stimulus.
Asian as well as European stocks were mostly trading in red, tracking weak cues from Wall Street. Global equities were bearish today as waning hopes for US economic stimulus and surging coronavirus cases in the United States and Europe raised concerns about more damage to weakened economies.
Worldwide, there were 437 lakh confirmed cases and 11.64 lakh deaths from COVID-19 outbreak. India's COVID-19 caseload breached the 79-lakh mark and the death toll from COVID-19 infections rose to 1.19 lakh, as of today.
S Ranganathan, Head of Research at LKP Securities said," Bulls took centre stage today led by Financials as Kotak Bank led from the front buoyed by MSCI review. Afternoon trade witnessed FMCG taking control ably supported by Cement stocks. Broader markets also saw participation across select counters".
On markets closing --Manish Hathiramani, proprietary index trader and technical analyst, Deen Dayal Investments said," After going below the crucial support of 11750 in early hours of trade, the Nifty swiftly flew past the 11850 level and closed above it. The index needs to cross 11900-11950 in order to generate early buy signals and thereafter we can expect the index to achieve 12200-12300. Breaking of 11700 would indicate a fresh wave of sells which could drive the index down to 11400-11450."
Shrikant Chouhan, Executive Vice President (Equity Technical Research), Kotak Securities said,"Market sentiment improved following the positive news flow of likely increase in weight and inclusion of potential candidate in the MSCI index portfolio. On an intraday basis, the Nifty has hit a double bottom at 11,720. On a daily chart, the market is on the verge of forming an ascending triangle, which would spend time between 11700 and 12050 levels. The Bank Nifty is in rising consolidation and could move to the 25300 levels after the dismissal of 24850."
He added," Tomorrow the market trend could be dictated by Reliance Industries (RIL). Based on the September 2020 quarter performance of RIL we could see the market movement. The rise in RIL stock can lift the market beyond 12050. A fall in RIL would again drag the sentiment of the market, pulling the Nifty to 11750 levels."
On the currency front, Indian rupee pared early losses and settled 13 paise higher at 73.71 per US dollar, tracking positive domestic equities.