Sensex and Nifty extended gains for the third straight session and closed higher on Friday, backed by positive global equities amid healthy macroeconomic data flow and hopes of a COVID-19 vaccine. Tracking gains in index-heavyweights Reliance Industries, HUL and Kotak Bank, Sensex closed 177 points higher at 36,021 and Nifty ended 55 points higher at 10,607.
Yesterday, Sensex gained 429 points to 35,843 and Nifty rose 121 points to 10,551, led by gains in financials and auto stocks. On a weekly basis, both benchmarks gained 2.4% each. Sensex has gained 1,104 points in the last 3 sessions, while Nifty has climbed 305 points.
Bajaj Auto, followed by Asian Paints, Bharti Airtel, HUL, Reliance Industries, HUL and Kotak Bank were among the top gainers in the Sensex pack. On the contrary, Tata Steel, HDFC, M&M and Bajaj Finance were among the laggards. Sectorally, gains in realty, auto, FMCG, IT and pharma were capped by losses in banking, PSU Bank, metal and financials.
Positive news around the development of a potential coronavirus vaccine and not so weak key economic data from US and China also kept momentum positive in equity markets worldwide. However, gains were capped amid rising coronavirus cases across the world that weighed on market sentiments.
Wall Street ended higher yesterday following positive jobs data in the US, registering a record increase in payrolls and a decline in unemployment.
Meanwhile, bourses in Shanghai, Hong Kong, Tokyo, Singapore and Seoul were trading with gains. China's June Caixin/IHS Markit services PMI came in at 58.4 Vs 55 (MoM) and new business for China services firms expanded at the fastest pace in 10 years even as employment fell for the 5th straight month.
Over the market's movement, Vinod Nair, Head of Research at Geojit Financial Services said, "Globally, US monthly employment report and domestically the PMI survey, seemed to indicate that the worst of the lockdown is over. However, any extension or resetting of lockdown measures, due to increasing infections, could negate the gains. Progress of a vaccine trial also added to the optimism. In spite of improving economic data, markets are still largely moving on hope rather than on any real change in the ground realities."
Commenting on Nifty's technical indicators, Rohit Singre, Senior Technical Analyst at LKP Securities said," Index has good resistance near 10700-10800 zone and one can use mentioned levels to book profit on every rise, good support is shifted at 10500-10400 zone so until holding above said levels we may see strength to be there".
On the currency front, Rupee, the local currency opened at a 3-month high of 74.60 per dollar and later closed at 74.64 per dollar as against the earlier closing price of 75.01 per dollar today.
Commenting on rupee's outlook today, Jateen Trivedi, Senior Research Analyst (Commodity & Currency) at LKP Securities said," Rupee ended at over three month high as risk appetite boosted following an upbeat US employment data, while likely overseas inflows into local stocks weigh down spot pair. Rupee has now taken support at 75.50 broadly after yesterday's broad based selling. on upside rupee can test levels of 74.40-74.20".
On rupee's jump to 3- month high at the opening bell, Sugandha Sachdeva VP-Metals, Energy & Currency Research, Religare Broking said,"The bias for the rupee has shifted towards appreciation, given the risk-on environment and significant flows in the market, and as strong data sets from the U.S. have weighed on the dollar. That should lead to the rupee testing levels of 74.30 and 74 eventually, having said that, we believe the RBI will step in at regular intervals, and will not be comfortable to see the rupee appreciate beyond the 73.90 to 74.00 band."
In India, the number of infections inked to Covid-19 disease spiked to 6.25 lakh, while the death toll rose to 18,213. Worldwide registered cases has crossed 1.08 crore figure and the death toll has topped 5.20 lakh.
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