Markets Witness Healthy Gains

Mumbai, October 29: Markets today witnessed healthy gains on the back of expectation of further announcements by the government on the taxation side to spur growth.

 Sensex, the benchmark 30-share index, closed over 581 points or 1.48 per cent up ending the day at 39,831.84. Nifty was up 1.4 per cent, closing at 4-month high of 11,787 while Bank Nifty was up 1.2 per cent. 

Both the Nifty and Sensex gained almost equal percentage points. All sectors closed in green except Telecom which was down 4 per cent. Auto and Metals both gained maximum and were up more than 4 per cent.

Siddhartha Khemka, Head - Retail Research, Motilal Oswal Financial Services Private Ltd, says markets have gained momentum on the back of several positive developments. Globally there was news of US reaching Phase One trade deal with China early next month. “On the domestic front, news flows regarding the government looking at simplifying various taxes related to equities is about to boost sentiments and revive investor confidence,” Khemka said. Q2 results so far have been in-line to marginally better than expectations. 

The latest numbers from ICICI Bank, SBI and Tata Motors were better than estimates and led to overall positivity. Tata Motors results were much better than street expectations and witnessed all around upgrades from analysts leading to sharp upmove in the stock as well as Nifty. “While the overall Nifty valuations are fair at ~22x FY20 P/E which could keep the Nifty upside caped, we believe that there are lot of stock selection opportunities. We find quality names both within large caps as well as midcaps which are trading at attractive valuations and could help keep the positive momentum in the market intact,” he said. 

Technically Nifty formed a Bullish Candle on daily scale as follow up buying was seen at higher levels. It managed to surpass its consolidation band trading between 11,550 to 11,700 zones after six trading sessions and supports are gradually shifting higher. Now it needs to continue to hold above 11,700 zones to witness an up move towards 11,850 – 12,000 levels while on the downside supports are seen at 11,700 then 11,650 levels.