Benchmarks Sensex and Nifty rose sharply on the last trading day of the month, in line with overseas trend, amid heavy buying in index heavyweights.
On April F&O expiry day, BSE Sensex ended 997 points higher at 33,717 and NSE Nifty closed 306 points higher at 9,859.Market witnessed heavy buying at ICICI Bank, Infosys, HDFC twins and Reliance Industries counters amid a rally in global stocks. Maruti, M&M, ICICI Bank, Infosys, Tata Steel, Bajaj Auto, Axis Bank and Bajaj Finance were among the top gainers on Sensex.
Led by firm global cues ahead of April F&O expiry day, Sensex opened 660 points higher at 33,381, while Nifty started 195 points higher at 9,748.
Market sentiments stayed upbeat for the fourth consecutive session on news of a vaccine being developed for COVID-19 patients. Investors worldwide were optimistic over the slowing of new virus cases and welcomed moves by policymakers to support the coronavirus-hit global economy.
Here's a look at top ten factors that led to Sensex, Nifty rally today.
1. Gilead Science' s new anti-COVID drug
Globally, markets were buoyed over the news of a possible breakthrough in testing for treatment of COVID-19. The positive development of a new anti-COVID drug from Gilead Science sent US markets rallying on Wednesday. Dow Jones closed 2.21% higher and NASDAQ gained 3.57%.
News about positive trial results of an experimental COVID-19 treatment helped investors shrug off bleak GDP data which showed that the US economy shrank at 4.8% rate last quarter.
Gilead Sciences a US-based biotech company said on Wednesday that its experimental drug has proved effective against coronavirus.
2. Corporate earnings
Shares of index heavyweights like Reliance Industries, Tech Mahindra, Hindustan Unilever were also in focus ahead of the release of financial results for the January-March period.
RIL was under keen watch by investors, ahead of Q4 earnings report, with oil conglomerate's shares rising 4.8% higher intraday, followed by Tech Mahindra that gained 4.45% intraday.
Besides the 3 heavyweights, Apollo Tricoat Tubes, Laurus Labs, Aditya Birla Money, Walchand Peoplefirst, Security and Intelligence Services and ABB Power Products and Systems will also report their March quarter results today.
3. Fund inflows
FIIs and DIIs both infusing funds also added optimism to markets, experts said. Yesterday, foreign investors bought stocks worth Rs 722 cr in the cash segment, stocks futures worth Rs 478 Cr and sold index futures worth Rs 66 cr. On a similar note, domestic investors bought stocks worth Rs 78.6 cr in equities on Wednesday.
4. Derivatives expiry
According to experts, the scheduled derivatives' expiry- April F&O expiry will also keep the volatility high today.Since today is the derivatives market expiry day, indices are likely to see some volatility later in the day ahead of the expiration of April futures & options contracts. Although amid the positive buoyancy, markets are to maintain its northward trajectory on the expiry day of the month, analysts said.
5. Overseas markets
Asian equity markets gained on Thursday, prompting a broad rally in Wall Street stocks amid optimistic comments from the Federal Reserve and signs of progress in treating the coronavirus. Traders will also be awaiting Bank of Japan monetary policy meeting updates to be released tomorrow.
US markets also gained from better than expected corporate earnings.
European indices opened in the negative, ahead of the latest monetary policy decision from the European Central Bank. The indices, however, erased initial gains and traded marginally higher following reports of positive trial results of an experimental COVID-19 treatment in the US.
Traders said opening up of lockdown in partial stages will also keep market sentiments positive.
6. Oil price rises
Oil futures continued to rebound after plunging at the start of the week and advanced for a second day. Brent crude rose on signs of fuel consumption starting to recover in the world's biggest economies, while global production cuts also began to offset the demand destruction due to the coronavirus-led-shutdown.
Brent Crude futures, the global oil benchmark were trading at $23.68 per barrel, rising 5.06%.
7. Positive Fed comments
Investors were also buoyed by the comments from US Federal Reserve. The Fed announced that it will keep its key short-term interest rate near zero. Further, the Fed announcing that it is in no hurry to end its economic stimulus also kept investors optimistic.
8. China's manufacturing data
Asian shares were trading higher ahead of the release of China's manufacturing data. As per early estimates, the country expanded slightly in April with businesses starting again amid ease in lockdowns. Chinese manufacturing activity came in at 50.8 compared to 52 in March.
9. Nifty's Technical outlook
With Nifty closing above 9,500 level yesterday, the index has breached its 8800-9400 congestion zone on the higher side. Traders said positive global cues and broad based-sectors-led rally caused the index to successfully surpass crucial resistances in today's trade.
As per Nifty's moving average, 9800-9850 will be the testing level in the near term. Nifty will find support around 9,450, while 9800 will act as resistance on the upside. Nifty's near support levels are 9242 and 8949, while its resistance levels are 9879 and 11,126, according to its 10,20, 50 and 100-day simple moving averages.
10. Across the board buying
Buying was seen across the board in trade today, keeping the market breadth fairly positive. While, metal, IT and auto stocks gained almost 5% each, financials and banking stocks continued their upward rally forward in today's trade. On the contrary, FMCG and pharma sectors were trading flat with negative bias.