Taking Stock | Another high: Sensex zooms past 49,000, Nifty closes in on 14,500

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The market began the week on a strong note with the benchmark indices finding new highs led by IT and auto stocks. The BSE Sensex closed 486.81 points, or 1 percent, high at 49,269.32, and the Nifty was up 137.50 points, or 0.96 percent, at 14,484.80.

“Improved outlook for third-quarter earnings along with strong global cues helped the Sensex to breach the 49,000-mark. The rally in the market was led by the IT sector backed by firm earnings results, however, small and midcap stocks were under pressure,” said Vinod Nair, Head of Research at Geojit Financial Services.

“Hopes of a new US stimulus to be unveiled this week created an upbeat movement in Wall Street, while profit-booking was seen in the European markets. This ongoing rally is being fueled by strong Q3 earnings preview, foreign fund inflow and optimism around Union Budget 2021,” he added.

The Nifty IT index rose 3 percent, auto added 2.6 percent and FMCG and pharma indices rose a  percent each. Metal and PSU bank indices ended a percent lower.

Broader markets underperformed, ending with marginal losses.

Tata Motors, HCL Tech, Infosys, HDFC and Wipro were among major gainers on the Nifty, while losers were Tata Steel, Bajaj Finance, Bajaj Finserv, Reliance Industries and L&T.

Stocks & sectors

The BSE IT index added 3.6 percent, auto Index rose 2.5 percent and the FMCG index was up 1 percent. Metal, capital goods and power indices shed a percent each.

A volume spike was seen in Tata Motors, Colgate Palmolive and Tata Consumer Products.

Long buildup was seen in Tata Motors, Gail and MRF, while short buildup was seen in Bata India, IndusInd and RBL Bank.

More than 450 stocks, including Infosys, Grasim Industries and Ashok Leyland, hit a fresh 52-week high on the BSE.

Technical View

The Nifty formed a bullish candle on the daily scale along with a long lower shadow, which indicates that dips were being bought quickly and bulls were in full action.

It continued the formation of higher highs for the thirteenth trading session.

“Now, it has to continue to hold above 14,300 zone to witness a fresh move towards 14,600 and 14,750 zones, while on the downside, major support exists at 14200 and 14100 levels,” said Chandan Taparia of Motilal Oswal Financial Services.

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