Extending the rally for the second consecutive day on Thursday, the benchmarks gained more than half per cent in the closing trade amid softening oil prices, entry of South west monsoon and foreign institutional investors (FIIs) cutting their selling. The broader Nifty50 gained 143.10 (0.89%) to close at 16,132.90, while the 30-share Sensex added around 427.49 points or (0.80%) to settle at 54,178.46 ahead of earnings season that will start with IT behemoth TCS presenting its results on Friday, July 8.
In the broader market, Nifty Midcap and Smallcap rose higher by 1.3% and 1.5% respectively.
FMCG, among sectoral indices, witnessed marginal profit booking after the index outperformed the market in the past one week. However, all other Nity sectoral indices ended the day in the green. Nifty Metal and PSU Bank were the top gainers, surging by nearly four per cent in the closing hours.
“The penultimate day ahead of the earnings season witnessed buoyancy as Bulls pressed the accelerator with the south-west monsoon lashing the financial capital. Financials led the rally with the market breadth showing a marked improvement as several stocks in the Small & Midcap space saw keen investor interest,” said S Ranganathan, Head of Research at LKP securities.
Cooling Oil prices coupled with the progress made by the Monsoon has now set the stage for the first quarter earnings beginning Friday, the expert added.
Certain stocks also came in focus on Thursday. These stocks were Star Health, Sobha and Ceat. Shares of Star Health gained over 11%, Sobha ended hiher by nearly 10% and Ceat gained more than nine per cent in the closing trade on Thursday.
Here is what Gaurav Ratnaparkhi, Head of Technical Research, Sharekhan by BNP Paribas
1. Star Health
The stock has seen a sharp reversal today after a significant decline. The recovery was accompanied by volumes as well. The daily momentum indicator has turned in favor of the bulls. Thus the stock looks set to test its key DMAs on the upside, which are near 572 & 600. These will be the targets on the upside from short to medium term perspective
2. Sobha Ltd
The stock has been in a recovery mode since the second half of June. On the way up, it has crossed multiple short term hurdles. Going ahead, 656-660 is the near term hurdle zone to watch out for. If that is crossed then the stock can march towards its 200 DMA, which is near 740
3. Ceat Ltd
The stock has witnessed strong traction in the last couple of sessions. Today it has surpassed it key weekly moving averages as well as the 200 DMA. Sharp increase in volumes with the price action suggests that the rally is likely to sustain at higher levels. On the higher side, 1200-1210 will be the short term target area whereas the medium target will be 1330