It was a day when the Bulls had it all the way. The debate on what is happening with the festive season continued to go in their favour. More companies, which announced their results, indicated that their festive season sales had been better than their estimates. This led to a rise in consumption stocks like HUL, which made a new high on Thursday, along with other consumption-related stocks which showed an increase. This has raised the hopes on the markets that bottom line and top-line numbers for the October-to-December quarter would be better.
To add to the cheer on Dalal Street, the news of a Brexit breakthrough deal added to the gains. Although the Brexit news came during the last part of the trading day, it could still add a push to some segments of the market. Companies such as Tata Motors, Motherson Sumi and Tech Mahindra, which have a reasonable stake in the economic growth of United Kingdom -- and which had been underperforming due to the uncertainty on Brexit -- witnessed a sharp surge. A part of this upwards move was due to short covering, as these counters had heavily strong positions. But whether the rally would be sustained would depend on the kind of guidance these companies give over the next couple of days.
In the early part of the trading day, Nifty was trading within a range-bound mode and mid-caps and banking indices gained weight. The market breadth too was much better. That indicated that when the expiry of contracts takes place towards the last part of the trading session, short covering would take place. Yet, NSE’s Nifty ended the day with a gain of 122.35 points or 1.07 per cent to close at 11,586.35 while BSE’s Sensex gained 453.07 points or 1.17 per cent to end the day once again above 39,000 mark at 39,052.06.
Another noticeable feature of Thursday’s trade was that a large number of stocks which had been under sharp pressure witnessed upward moves. The troubled stocks like Yes bank led the Nifty gains with a rise of more than 15 per cent to close at 47.40. The way market breadth is panning out, it appears that Bulls might continue with their sway for some more time.
(Shilpa Nagpal is an analyst at Market Wizards Securities Pvt Ltd)