RBI's liquidity shot lifts pharma, bank stocks; Sensex leaps 424 pts

The RBI's well guarded measures which, analysts believe, are tuned to the evolving situation may support the economy going forward

Stock market updates: A prompt and timely monetary policy response by the Reserve Bank of India to the wrecking Covid-19 wave gave Indian equities a booster shot, lifting the benchmark indices 0.88 per cent higher on Wednesday. The RBI's well guarded measures which, analysts believe, are tuned to the evolving situation may support the economy going forward.

Earlier today, the apex bank announced a Covid-19 healthcare package of Rs 50,000 crore for vaccine makers, medical equipment suppliers, hospitals and patients in need of funds. Besides, individual borrowers and small businesses with loan outstanding of up to Rs 25 crore, and who did not avail for moratorium or restructuring relief last year, can ask for restructuring of their loans for up to 2 years.

Furthermore, the RBI will also have a special long-term repo operation window for small finance banks, whereby the banks can borrow funds up to Rs 10,000 crore at repo rate for deploying for fresh loans SFBs, to be deployed for fresh lending of up to Rs 10 lakh per borrower. READ ABOUT IT HERE

The announcements received a thumbs up from market participants who lapped up pharma and bank stocks. The Nifty Pharma index climbed over 4 per cent with individual stocks such as Lupin, Aurobindo Pharma, Cadila Healthcare, Sun Pharma, and Torrent Pharma soaring between 5 per cent and 14 per cent.

The Nifty Bank index, meanwhile, ended 1.6 per cent up. Individually, AU Small Finance Bank, Ujjivan Small Finance Bank, Equitas Small Finance Bank, Axis Bank, IndusInd Bank, and ICICI Bank gained up to 4 per cent.

The Nifty Financial Services, IT, Auto, and Metal indices gained up to 1.3 per cent on the NSE.

Overall, the benchmark S&P BSE Sensex closed the session at 48,677.5 levels, up 424 points or 0.88 per cent. In the intra-day trade, the 30-share barometer hit a high and low of 48,743 and 48,254, respectively.

On the NSE, the Nifty50 hit an intra-day high of 14,637 but shut shop at 14,618 levels, up 121 points or 0.84 per cent.

In the broader markets, the S&P BSE MidCap index settled over 1 per cent higher while the S&P BSE SmallCap index gained 0.7 per cent.

Global markets

European stocks bounced back on Wednesday after a sharp selloff in the previous session, helped by gains in commodity and banking stocks. The pan-European STOXX 600 index rose 1.3 per cent, with the German DAX jumping 1.3 per cent and the UK's FTSE 100 gaining 1.1 per cent.

On Wall Street, futures of all three main indices were ruling up to 0.5 per cent higher.

(With inputs from Reuters)

4:52 PM

TECH VIEW :: Nagaraj Shetti, Technical Research Analyst at HDFC Securities

The short term trend of Nifty remains dicey with one day of negative and positive movements. At the same time, the immediate support of 14415 seems to be holding and a sustainable move above 14725 could open fresh buying enthusiasm in the market. On such formation more upside could be expected. Any failure to sustain above 14700 levels is likely to trigger another sell on rise from the highs

4:43 PM

TECH VIEW :: Ashis Biswas, Head of Technical Research at CapitalVia Global Research

The market witnessed some lackluster movement and an attempt to hold the support level around the Nifty 50 Index level of 14500. The trading above 14500 is positive from a short-term perspective. Sustaining above 14500 levels, the market to gain momentum, which could lead to an upside projection till 14800-14900 level. The momentum indicators like RSI, MACD to recover after staying neutral in recent time.

4:33 PM

TECH VIEW :: Sumeet Bagadia, Executive Director at Choice Broking

Technically, the nifty index has taken good support of 100 days SMA and sustained above Middle Bollinger Band formation, which indicates further upside move in the counter. Moreover, the recent candle also formed like a Hammer Candlestick on the daily chart, which is a sign of a bullish trend. An oscillator Stochastic has indicated positive crossover, which supports the bullish trend for the near term. At present, the nifty index is holding support at 14450 levels while an upside resistance seems at 14860 levels.

4:21 PM

MARKET CLOSING COMMENT :: Ajit Mishra, VP - Research, Religare Broking

Markets traded volatile for yet another day but managed to end higher. After the initial uptick, the benchmark hovered in a range for most of the session but sustained recovery in the last one and half hours aided the index to close around the day’s high. Consequently, the Nifty index settled above 14,600; up by 0.8%. The market breadth too was inclined strongly on the advancing side. Mostly sectoral indices traded in the tandem wherein pharma outshined the others.

We feel the timely intervention by the apex bank has relieved the participants to some extent amid the prevailing uncertainty. However, it failed to trigger a decisive move in the benchmark indices and we might see further consolidation. On the flip side, there’s no shortage of trading opportunities on the stock-specific front so participants should align their positions accordingly while keeping a check on leveraged trades.

4:09 PM

MARKET CLOSING COMMENT :: Deepak Jasani, Head of Retail Research at HDFC Securities

India benchmark equity indices rose on May 05 after the RBI announced measures to further support the economy as coronavirus cases continue to surge. A late surge in the markets post 1415 Hrs led the indices higher. At close the NSE Nifty 50 rose 0.84% or 121 points to 14618.

Volumes on the NSE were in line with recent averages. Among sectors, Healthcare, Banks and Metals were the main gainers while Realty was the loser.

Nifty formed an inside day on May 05, meaning that the high low range for the day was within the high low range of the previous day. However the Nifty closed near its intra day high. Advance decline ratio too became positive. 14461-14723 continues to be the range for the Nifty in the near term. In case we do not see a negative day tomorrow, then we may have seen a near term bottom at 14416 on May 03.

3:59 PM

MARKET RECAP :: S Ranganathan, Head of Research at LKP Securities

RBI sops and MSCI rebalancing next week propelled Indices higher by nearly a percentage led by Pharma with good support from Banks. The broader market witnessed keen interest in Shipping stocks and select PSU stocks.

3:54 PM