Nifty logs best expiry in November since March 2016; auto numbers, elections to hold key ahead
Stock markets continued their ascent for the fourth session on Thursday, lifted by fall in crude oil prices, rise in rupee and dovish comments by US Federal Reserve chairman Jerome Powell.
The benchmark BSE Sensex rose 453.46 points, or 1.27%, to close at 36170.41 on the expiry day of the November series. The index, which hit an intra-day high of 36252.11, has gained 1189.39 points in last four sessions.
The broader Nifty rose 129.85 points, or 1.21%, to close at 10858.70.
US Federal Reserve Chair Jerome Powell said the central bank's policy rate is now "just below" estimates of a level that neither brakes nor boosts a healthy US economy, which investors read as signalling the Fed's three-year tightening cycle is drawing to a close.
"Market held on to its strong gap-up momentum fuelled by Federal Reserve's dovish tone on interest rate cycle coupled with a fall in the US bond yield to 2.99. Tailwinds in domestic macros led by a sharp fall in oil prices and a strong rupee supported the trend. While any ease in global trade tension after G20 meet this weekend will fillip global sentiment," said Vinod Nair, head of research at Geojit Financial Services.
The rupee on Thursday rose 77 paise and slipped below 70-level closing at 69.85 against the US dollar.
Nifty closed with the handsome gains of 7.25% in the November series, recovering most of the losses in October series, registering its best expiry since March 2016.
Market-wide rollovers stood at 82% compared to the average rollovers of 81% (last three series). December series will start with market-wide future OI (open interest) of Rs 1.29 lakh crore as against Rs 1.21 lakh crore seen at the start of the November expiry.
"For the December series, on options front, maximum Put OI (open interest) is at 10000 followed by 10500 strikes while maximum Call OI is seen at 11000 followed by 11500 strikes. OI concentration scattered at different strikes, but an early data set-up suggests a trading range in between 10700 to 11000 zones," Chandan Taparia, derivatives and technical analyst at Motilal Oswal Financial Services said.
Bajaj Auto, Kotak Mahindra Bank, Mahindra and Mahindra, Vedanta and IndusInd Bank contributed most to the Sensex's rally advancing as much as 4.68%.
The broader market too staged a firm performance as both BSE Midcap and Smallcap indices rose 0.62% and 0.22%, respectively.
"We saw a huge rally in the last four days. Thursday's rally was based on Fed's reaction only. This is a temporary movement. The market will next take a cue from the auto sales numbers," A K Prabhakar, head of research at IDBI Capital said.
"Though indices have gone up the market breadth was not very good. The stocks have rallied a lot and now are overvalued. The strengthening of the rupee is not a good thing for now. Information Technology stocks will be impacted if the currency further strengthens," Prabhakar said.
Sectorwise, BSE Metal (2.01%) was the top gainer followed by Bankex (1.75%), Finance (1.66%), Energy (1.48%) and Basic Materials (1.41%).
"Elections are very important for the Indian market and investors will closely watch it. Traditionally, November-December has been a good month for foreign flows and this year also we are seeing the same trend," Prabakar said.
Meanwhile, as per the provisional data, both the foreign institutional investors (FII) and domestic institutional investors (DII) bought shares worth Rs 823.47 crore and 973.31 crore, on a net basis on Thursday.
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US Federal Reserve Chair Jerome Powell said the central bank's policy rate is now "just below" estimates of a level that neither brakes nor boosts a healthy US economy, which investors read as signalling the Fed's three-year tightening cycle is drawing to a close.
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