Headlines indices the Sensex and the Nifty extended gains into the second consecutive session on April 21 as investors continued picking stocks on cheaper valuation after the recent correction.
The IT and banking stocks are witnessing traction after the recent selloff which is keeping the market up. However, nothing much has changed fundamentally and the market continues to stare at near-term headwinds in terms of inflation, looming rate hikes and geopolitical uncertainty.
Sensex opened in the green and traded higher throughout the session with decent gains in shares of Reliance Industries, Infosys, TCS and HDFC twins.
The 30-share pack closed 874 points, or 1.53 percent, higher at 57,911.68 with 27 stocks in the green and only three stocks - Tata Steel (down 0.88 percent), Bharti Airtel (down 0.63 percent) and Nestle (down 0.60 percent) - in the red.
Stocks such as Mahindra & Mahindra (up 3.50 percent), Maruti Suzuki (up 2.70 percent), Bajaj Finserv (up 2.46 percent), Asian Paints (up 2.38 percent) and Reliance Industries (up 2.35 percent) ended as the top gainers in the Sensex kitty of stocks.
Shares of Reliance Industries hit their fresh record high of ₹2,788.80 in intraday trade after Morgan Stanley maintained an 'overweight' view on the stock and raised the target price to ₹3253 from ₹2926.
"Resurgence of investor interest in IT and Banking space along with support from heavyweights and global peers helped in strengthening the market. However geopolitical worries, inflation fears and likely hike in fed rates are pressurising the foreign investors to continue their selling spree," said Vinod Nair, Head of Research at Geojit Financial Services.
"Increasing oil prices on concerns over potential EU ban on Russian imports will be a short-term headwind resulting in volatility in the market," Nair added.
Mirroring the trend of the benchmark index, the BSE Midcap index rose 1.28 percent and the smallcap index climbed 1.33 percent. Among the sectors, the BSE Auto index rose 2.14 percent, emerging as the top gainer among the sectoral indices. Many indices, including bank, finance, pharma, IT, capital goods and consumer durables, rose over a percent higher each.
Nifty50 closed 256 points, or 1.49 percent, higher at 17,392.60. Mohit Nigam, Head - PMS, Hem Securities pointed out Nifty closed above the good resistance zone of 17,300 and if the index holds above the 17,300 mark in the coming trading sessions, we may see more upward move towards the 17,500-17,800 mark that is another resistance zone on the upside.
Brent Crude traded below the $110 per barrel mark while the rupee closed 5 paise higher at 76.16 per dollar.
"Bulls came back strongly today after a pretty long wait helped by the energy sector which is seeing robustness in gross refining margins. Almost all sectoral indices led by automobiles traded in the green with the volatility index cooling off. Accumulation seen in some of the big boys which led the fall during the last one week helped the bulls get back strongly today," S Ranganathan, Head of Research at LKP securities, observed.
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