The markets closed on a buyoant note on April 4. The benchmark index traded higher on Monday and closed positively, following positive Asian market peers. The Nifty50 index inched up by more than 2 percent to close at 18053.40 levels while Banknifty gained more than 4 percent to settle at 38635.20 levels.
Equity benchmark Sensex surged over 1,300 points on Monday to reclaim the 60,000-level, boosted by intense buying in banking and financial stocks after the announcement of merger between HDFC and HDFC Bank.
Strong global cues and receding crude oil prices also propped up the domestic equity markets, according to traders. On the sector front, the Nifty Metal added more than 2 percent gains followed by the Nifty AUTO, Healthcare and PSE sector. Moreover, BSE Smallcap & Midcap has also contributed 1.2 percent gains in a day.
Shares of HDFC and HDFC Bank rallied nearly 10 percent as investors lapped up the merger deal.
In the biggest merger in corporate history, India's largest housing finance company HDFC Ltd will merge with the country's largest private lender HDFC Bank to create a banking behemoth.
At close, the Sensex was up 1,335.05 points or 2.25 percent at 60,611.74. The Nifty50 was up 382.90 points or 2.17 percent at 18,053.40. About 2534 shares have advanced, 796 shares declined, and 118 shares are unchanged.
The scrip of HDFC Bank surged 9.97 per cent to Rs 1,656.45, while HDFC Ltd jumped 9.30 per cent to Rs 2,678.90.
The other gainers in the Sensex pack included Kotak Bank, HUL, L&T, IndusInd Bank and Sun Pharma.
Among the major Nifty gainers were HDFC Bank, HDFC, Adani Ports, HDFC Life and Kotak Mahindra Bank. Infosys, Titan Company and Tata Consumer Products were major laggards.
Though the markets opened weak, key indices quickly rebounded and clung on to the key psychological levels of 60,000 and 18,000 respectively. Shrikant Chouhan, Head of Equity Research (Retail), Kotak Securities Ltd, said, the trigger was that the markets gave thumbs up to the HDFC merger announcement and the rally in both the stocks spread to other financial stocks and also had a rub off effect on other sectoral stocks. Also, recent key economic indicators such as core growth numbers and all-time high GST collections showed that the domestic economy has shrugged off geo-political tensions.
On daily charts, the Nifty is holding an uptrend formation but due to overbought texture, traders may prefer to book some profit at higher levels. For the trend following traders, 17,880 would act as a crucial support level, and above the same the index may touch the level of 18150-18,200. On the flip side, a quick intraday correction is not ruled out if the index trades below 17,880 and below the same it could retest the level of 17,790-17,750.
Sachin Gupta, AVP-Research, Choice Broking said, Technically, the nifty index has confirmed the breakout of the Bullish Engulfing pattern and moved above the prior swing highs. Moreover, the index has sustained above 50-days Exponential Moving Averages and showed positive crossover in MACD & Stochastic that suggests a bullish move for the near term. On the four hourly charts, the stock has also traded above the Horizontal Line that indicates a bullish strength for the coming day. At present, the index is having support at 17,800 levels while resistance is placed at 18,350 levels. On the other hand, Bank nifty has support at 38,100 levels while resistance at 39,200 levels.
More than 70 percent of contribution to the gain of Nifty50 because of HDFC twins also led to short covering in the market, said Parth Nyati, Founder, Tradingo. Global cues are stable whereas prices are cooling off and FIIs are showing buying interest that is leading to outperformance in the Indian equity market.
Technically, the Nifty has strong bullish momentum however it is trading near a downsloping trendline resistance placed around the 17125 level; above this, there is a high probability of new highs in the market this month itself. On the downside, 17800 will act as immediate support while 17,500-17,400 has become a strong base.
Banknifty is outperforming and it has a strong structure where 39200-39500 will be the next resistance area. On the downside, 38000 is an immediate support level while 37200-36800 has become a strong demand zone, Nyati said.
Nifty bulls seize control of the psychological 18000 mark as HDFC, HDFC Bank stocks witnessed a spectacular rally and the twin stock also surpassed TCS in terms of market capitalisation, said Prashanth Tapse, Vice President (Research), Mehta Equities. Helping sentiments were renewed buying interest from FIIs, easing of the Russia-Ukraine crisis and most importantly, fall in oil prices. The impulsive risk-on theme and Nifty’s strong closing shall usher in a ‘new leg to the bull market. Bargain hunting and momentum buying will continue to be the preferred theme. Nifty will aim to reclaim its all-time-high at 18,605 mark amidst the upbeat mood and WTI Oil prices tumbling below $100 a barrel. Technically, Nifty’s downside should be limited at 17,717 mark.
Asian bourses close with gains
Elsewhere in Asia, bourses in Tokyo, Seoul, Hong Kong and Shanghai closed with healthy gains.
Stock exchanges in Europe were also trading significantly higher in mid-session deals.
Crude prices decline
Meanwhile, international oil benchmark Brent crude declined 1.05 percent to $103.29 per barrel.
FIIs net buyers
Foreign institutional investors (FIIs) were net buyers in the capital markets as they bought shares worth Rs 1,909.78 crore on Friday, as per exchange data.
Rupee up
The rupee started the financial year 2022-23 on a bullish note and settled 19 paise higher at 75.55 (provisional) against the US dollar on Monday, supported by a firm trend in domestic equities.
At the interbank forex market, the local unit opened at 75.77 against the greenback and witnessed an intra-day high of 75.42 and a low of 75.79.
It finally ended at 75.55, registering a rise of 19 paise over its previous close.
On Thursday, the last trading session of FY 2022, the rupee had advanced by 16 paise to close at 75.74.
