Indian stock markets rose today for the seventh day in a row, led by gains in bank stocks. The Reserve Bank of India today kept interest rates unchanged but announced measures to boost liquidity and lending. The Nifty was up 0.67% to 11,914.20 and the Sensex gained 326 points to 40,509.49. The indices have added more than 4% this week.
The Reserve Bank of India said today that it would use long-term buybacks and bond purchases on the open market, among others, to ensure liquidity in the banking system. The Nifty Bank Index rose as much as 3.1% to its highest level since Sept. 3 after the central bank lowered capital requirements for home loans to stimulate lending to the real estate sector.
Strong gains in recent sessions have made some analysts cautious. “Markets have been overbought after relentless rally over the past 2 weeks. However, the rate of anticipated decline continues to be negative over the past few days, suggesting profit-taking in the markets overall. Over the next 1 -2 days we expect even the Nifty to come under some pressure as large caps also need to consolidate / correct after such an increase, “said Deepak Jasani, director of retail research at HDFC Securities.
The Governor of the Reserve Bank of India, Shaktikanta Das, said that the country’s gross domestic product may emerge from the coronavirus-induced contraction and turn positive by the fourth quarter of 2020.
Shares of HDFC Bank, ICICI Bank and Axis Bank and State Bank of India were among the top gains on the top-line Nifty 50, gaining between 3.6% and 4.1%.
The Nifty IT index finished 0.65% higher after Wipro Ltd gained 4.4% to be the main winner of the Nifty 50 index.
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Here’s what analysts had to say about the current market performance:
Manish Hathiramani, Technical Analyst and Property Index Trader, Deen Dayal Investments
“Markets maintained an upward trajectory shortly after their tepid open. We are entering the weekend with a strong close where the Nifty is not too far off the 12000 price mark! 12200-12300 is a potential target for the The index is capable of reaching. during the course of this month. 11400 is a good level of support. “
Ajit Mishra, Vice President of Research, Religare Broking Ltd
“We believe that the recent dynamism in the banking package may help the index move up a bit, but traders need to be more cautious in their selection of stocks as we are seeing limited participation from the major indices. Also, with the season. With earnings gaining pace, the possibility of erratic stock fluctuations cannot be ruled out. “
S Hariharan, Head of Sales Trade, Emkay Global Financial Services.
“This week was marked by strong outperformance from finance, supported by accommodative policy measures from RBI and further evidence of recovery in economic activity fueling optimism on the asset quality front. We can expect a performance rotation between sectors with sideways movements in broader indices and a consolidation of strong market performance. Defensive sectors can be expected to perform better in the short term in such a scenario. The overall cash flow outlook remains strong with net DII and FII buyers incrementally over the last few sessions. ” (With contributions from the agency)
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