Govt's unlock Phase 1.0 enthuses markets: Sensex soars 879 points, Nifty jumps to 9,800-level; Bajaj Finance top gainer at around 11%

The Sensex surged driven by gains in Reliance Industries, HDFC twins and TCS as investor optimism heightened after the government began the process of unlocking the economy.

FP Staff June 01, 2020 17:02:54 IST
Govt's unlock Phase 1.0 enthuses markets: Sensex soars 879 points, Nifty jumps to 9,800-level; Bajaj Finance top gainer at around 11%

The markets made a gap-up opening tracking positive Asian peers as China's May month factory activity expanded. Investors' sentiments also got a boost after the announcement of the government unlocking Phase 1.0 to resume economic activities. Shares ended up over 2 percent on Monday in a broad-based rally, gaining for a fourth straight session, as optimism around imminent reopening of Asia’s third-largest economy after a months-long coronavirus lockdown boosted investor sentiment.

The Nifty ended 2.4 percent higher and all sectoral indices ended with healthy gains. Nifty PSU bank surged 7.6 percent while Nifty Bank and Metal ended with over 3 percent gains. On the stock front, Bajaj twins and Titan remained the top gainers while Ultratech Cement, Bharti infratel and Dr. Reddy were the top laggards. Going ahead investors will keep a close on factors such as development related to economic lockdown across the globe, coronavirus situation, crude oil prices and US-China relationship.

Paras Bothra, President of Equity Research, Ashika Stock Broking, said, "Domestic shares zoomed higher at opening and stayed strong all throughout the day as investors ignored fourth-quarter GDP data and reacted positively to the government's decision to come up with a phased re-opening of all activities outside containment zones beginning 1 June. Positive sentiments also supported after US President Donald Trump stopped short of specifying tough sanctions over China's new national security law for Hong Kong and Chinese PMI data showed fresh signs of economic recovery. All the sectoral indices ended in the green, while BSE Small cap and Midcap indices rose between 2-3 percent."

The Sensex surged driven by gains in Reliance Industries, HDFC twins and TCS as investor optimism heightened after the government began the process of unlocking the economy. Positive cues from global markets too buoyed investor sentiment here. After skyrocketing 1,250 points during the day, the 30-share index settled 879.42 points or 2.57 percent higher at 33,303.52.

Manish Hathiramani, Index Trader and Technical Analyst, Deen Dayal Investments, said, "The markets had a very impressive run and kept above the 9,800 levels until closing. Profit booking at these levels cannot be ruled out. However, the trend continues to remain positive and every dip can be used to accumulate the Nifty for a target of 9,950-10,000," he said.

Sumeet Bagadia, Executive Director, Choice Broking, said, "The benchmark indices continued the rally on the fourth straight day on 1 June after government relaxed some lockdown norms to revive the economy. All the sectoral indices ended in the green which suggest buyers are active in markets. The index has been trading with positive crossover of 21*50 Daily moving averages which points out strength in the index Momentum indicator RSI is reading at 63.24 with a positive crossover which further indicate upside move in coming trading session. At the present level, the index is facing resistance at 10,000-mark crossing above it can show 10,300-10,400 level with the support of 9,700-9,600-levels," Bagadia said.

Deepak Jasani, Head Retail Research, HDFC Securities said, “Buoyant Asian and European markets helped sentiments. Volumes were also healthy suggesting high delivery activity. Financials, Materials and Auto stocks did well while Pharma stocks came under selling pressure. Asian shares advanced to three-month highs on Monday as progress on re-opening economies helped offset jitters over riots in US cities and unease over Washington’s power struggle with Beijing.

"India is likely to receive 102 percent rainfall of a long-term average this year, the IMD said on Monday in its secong long-range forecast, raising expectations for higher farm output in India, which is reeling from the new coronavirus pandemic.

"European stocks rose in thin holiday trade (markets in Germany, Switzerland, Denmark and Norway were closed for Whit Monday holidays) on Monday after U.S. President Donald Trump stopped short of threatening tariffs on China and a private survey showed that China's manufacturing sector moved into expansion territory in May.

"Meanwhile, the downturn in the euro area manufacturing sector eased noticeably in May as companies restarted work, final data from IHS Markit showed. The manufacturing Purchasing Managers' Index improved to 39.4 in May from April's record low of 33.4. The U.K. manufacturing sector activity contracted as expected in the month of May, the final report from IHS Markit revealed with a score of 40.7.

"Technically, the Nifty has filled the down gap of 9,731 made on 4 May and in the process has formed a bullish island reversal. The 9,889-9,932 could be the resistance for the Nifty while 9,584-9,598 could be the support in the near-term," Jasani said.

Rupee settles 8 paise higher against dollar

The rupee appreciated 8 paise to provisionally close at 75.54 against the US dollar on Monday supported by optimism over the government's reopening plan for the domestic economy. Forex traders said foreign fund inflows, weak American currency and positive domestic equities also boosted investor confidence, PTI said.

The rupee opened at 75.32 at the interbank forex market, pared some gains, and finally settled at 75.54 against the US dollar, up 8 paise over its last close. It had settled at 75.62 against the US dollar on Friday. During the day, the local unit witnessed an intra-day high of 75.29 and a low of 75.60.

Brent crude futures, the global oil benchmark, rose 0.69 percent to $38.10 per barrel.

The dollar index, which gauges the greenback''s strength against a basket of six currencies, fell by 0.37 percent to 97.98.

---With inputs from agencies

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