From the word go on Thursday, it was the Bulls which controlled the action on Dalal Street. After opening in the green territory, Nifty 50 and Sensex 30, the two main indices, continued to gain throughout the day, although there were moments in the mid-session when volatility gripped the stocks. There was a higher number of stocks which traded in the green and that too with higher gains, as compared to the stocks which were trading in the red.
The Nifty ended the day at 11,573.30, with a gain of 133.10 points or 1.22 per cent higher while the Sensex gained 396.22 points or 1.03 per cent at 38,989.74. With these gains, the broader market indices almost regained all the ground lost the day before. A part of the upward movement was because of the rollover of long positions to October series – as the monthly and weekly derivative series ended on Thursday.
The boost to sentiment was both due to domestic and global factors. A statement from the United States that a trade deal was in the works with China, as also the comment that talks were on with Iran, gave a fillip to markets across Asia. In India, Dalal Street was abuzz with a rumour that the government was planning to bring in some supportive provisions for the NBFCs – to remove the stress faced by this important segment of the financial system.
Also doing the rounds was the talk that the government was likely to consider strategic divestment in some of the public sector units (PSU), including the oil and marketing major BPCL. This gave a serious push to the PSU stocks. If this divestment becomes a reality it would be taken as a major reform by the markets since that would not only take care of some portion of the fiscal stress but would also indicate a resolve on the part of the government to move out of doing business.
While the broader markets were bullish, some stocks, especially those which were moving out of the futures and options segment, saw some unwinding pressure.
The banking space, which is a prime mover of the Indian markets constituting around 35 percent of the major indices, witnessed a sharp recovery after Wednesday’s drubbing.
The way the carry-over of long positions to the October series -- which get kicked off on Friday – happened shows that it would have a bullish undertone, though volatility -- both on the intraday and overnight base – is likely to remain high in the coming few sessions.
(Nagpal is an analyst at Market Wizards securities private ltd)
