Brexit deal, divestment plans boost Sensex, Nifty

Equity market witnessed sixth consecutive session of gains with benchmark indices Sensex and Nifty-50 gaining over 0.6 per cent on positive global and domestic cues after Brexit deal and the Central government planning more PSU divestments to bridge the fiscal deficit gap.

Sensex gained 246.32 points or 0.63 per cent closing at 39,298.38 while the broader  Nifty-50 gained 75.50 points or 0.65 per cent to close at 11,661.85.

The broader market indices outperformed with BSE Mid Cap index gaining 1.78 per cent while BSE Small Cap index gained 1.65 per cent.

Market breadth was positive on the BSE/NSE with 1588 scrips gaining and 939 scrips losing on the BSE while 180 scrips closed unchanged.

Sectorally, all sectoral indices were gainers led by BSE Power Index (2.63 per cent), Capital Goods (2.05 per cent), Realty (1.96 per cent), Metal (1.83 per cent) and Consumer Durables (1.32 per cent).

Buying by foreign portfolio investors seemed to slow down, FPIs were net buyers of equities worth '36.56 crore only on Friday while the domestic institutions were net buyers by '586.88 crore.

Technical View
Amit Shah, technical research analyst, Indiabulls Ventures said, “Bulls continue to have the upper hand and index almost made to 11,700 zone. A move above 11,700 zone will push the momentum further and index in that event is likely to test previous all 12,000 mark on the upside. Market breadth was strong indicating broader participation from mid and small caps. 11,450 is the near term support.”

Mustafa Nadeem, CEO, Epic Research said, “Nifty pared its losses and rebounded to completely change the scenario in favour of the bulls. There has been a significant buying coming from lower levels which were felt in later part of the week as the momentum which was muted with marginal up moves saw an expansion. A decent rally further expanded due to short covering by participants.”

“So we now do see a good base around these lows of 11,250 – 11,300. For Nifty to take out 11,700 and move forward on the closing basis there is no stopping for an upside move to 12,130. We believe the only hurdle is now seen at 11700,” Nadeem explained.

Market View
Gaurav Dua, senior vice president and head, capital market strategy and investments, at Sharekhan By BNP Paribas said, “With sixth consecutive day of winning streak, the bulls seem to have got their mojo back. The upsurge was supported by positive policy actions domestically and the improving global cues initially.”

“The surprise rally seem to be leading to short covering by the bears now. Importantly, the positive sentiments are spreading to broader markets and the mid & small cap stocks are beginning to look up now. We expect the positivity to sustain in the run up to the festive season,” Dua said.