Nifty and Sensex extended their gains for a second session on December 2, powered by strong advances in pharma, realty, and auto stocks. However, the broader market stole the spotlight, soaring to a one-month high and boosting sentiment despite ongoing volatility and valuation concerns.
Investors brushed aside weaker-than-expected GDP data, which slowed to its lowest in nearly two years during the July-September quarter. In response, India’s 10- and 5-year bond yields dropped to a 30-month low.
This week, markets will likely react to RBI's MPC meeting scheduled for December 4. Moneycontrol’s poll of 15 economists, bankers and fund managers has revealed that the Reserve Bank of India (RBI) is expected to keep the policy rate unchanged for the eleventh time in a row due to higher-than-expected inflation numbers.
At close, the Nifty was up by 0.6 percent or 142 points at 24,276 while the Sensex climbed 0.58 percent or 445 points at 80,248. On the Bombay Stock Exchange, 2,509 shares advanced, 1,546 stocks declined and 182 were unchanged.
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"Today's strength can be attributed to the broader market, especially after the surprising extent of the fall in GDP numbers," Aishvarya Dadheech, Founder and Chief Investment Officer at Fident Asset Management said in a conversation with Moneycontrol. "The main concern -- FII selling -- will likely linger till the end of December and we expect it touches Rs 25,000 crore till the new year," he added.
The mid-small cap indices outperformed the frontline indices with gains of 1.1 and 1 percent, respectively. Market experts suggest that BSE Small-Cap and Mid-Cap have seen a decent correction in the past two months and could likely see renewed buying interest in the coming weeks. The two are trading 5 and 8 percent off their respective peaks.
Also read: Indian companies must take a leadership role in auto sector: Sajjan Jindal
Cement stocks sparkled in trade today and UltraTech Cement was the outlier with gains of almost 4 percent. This comes after Jefferies expressed optimism about a recovery for Indian cement companies in the second half of the fiscal year. Jefferies identified Ultratech Cement as its top pick among large-cap stocks and JK Cement as its mid-cap favourite, citing bottoming-out prices and an improving demand environment as key growth drivers.
EMS major Dixon Tech soared 6 percent to scale a fresh 52-week high in today's session after its wholly-owned subsidiary, Padget Electronics, announced plans to commence mass production of Google Pixel smartphones in collaboration with Compal Smart Device India for Compal's client, Google Information Services India.
Smallcap stocks saw a strong rally on Monday, with 463 BSE Smallcap stocks hitting their upper circuits. Notable names like Cochin Shipyard surged 5 percent to Rs 1,655.75 after securing a contract with the Ministry of Defence for INS Vikramaditya's refit. Pudumjee Paper Products soared 20 percent (up 40 percent in two days) to a 52-week high of Rs 186.35 on a six-fold jump in trading volumes.
Nifty Auto, IT, Metal, Pharma and Realty were the top sectoral gainers rising 1-3 percent. Realty index the rose the most backed by gains in Microtech Developers, Godrej Properties, DLF, and Prestige. Auto stocks rose mostly due to November sales data. The likes of Maruti Suzuki, M&M, TVS, Bajaj Auto and Tata Motors posted decent figures, thereby notching higher.
Nifty PSU Bank was the only sectoral laggard with losses of 0.2 percent. Union Bank, Bank of India and SBI dragged the index lower.
"After some time of consolidation, the market showed signs of recovery from 23,900 following the expiry. This suggests that the selling trend we've seen since September 27 might be shifting," says Anand James, Chief Market Strategist at Geojit Financial Services.
"It's an early indication that buyers are starting to take charge again, and we are now looking at 24,700, the 50-day simple moving average, as the next target. However, if the market struggles to stay above 24,230 early this week, it could pull back again, and we may have to wait for a recovery towards 23,700," he added.
UltraTech Cement, Grasim, Apollo Hospitals, Shriram Finance, and JSW Steel were the top gainers on the Nifty. HDFC Life, Cipla, SBI Life, NTPC, and Hindustan Unilever were the major laggards.
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