Sensex closes 272 points higher, Nifty at 11,470; Bharti Airtel, Hindalco top gainers

After a volatile trading session, domestic equity benchmarks - Sensex and Nifty - recovered from yesterday's sharp correction and ended on a bullish note on Tuesday, amid mixed global cues. Recovering from a 2% fall yesterday, Sensex ended 272 points higher at 38,900 and Nifty gained 82 points to close at 11,470.

Traders said the market participants were optimistic on the Supreme Court ruling allowing telecom operators a 10-year timeline to pay the AGR dues. Investors also turned bullish post-release of Manufacturing PMI (August), core sector and GST collection data.

Eicher Motors, NTPC, Nestle, Power Grid and Bajaj Finserv were the top gainers. On the other hand, TCS, Maruti, ITC, Nestle, Infosys, Wipro, HCL Tech, Sun Pharma,  were among the top losers today. Sectorally, gains in metal, pharma and FMCG were capped by losses in IT, private bank and PSU bank indices.

S Ranganathan, Head of Research at LKP Securities said, "Markets ended in the Green after an extremely volatile session on the back of the SC Judgement on the AGR dues, New Margin Norms kicking in from today and the reaction to the Q1 GDP numbers. Telecom & Metals led the rally on the indices with support of select Financials."

Vinod Nair, Head of Research at Geojit Financial Services said,"Indian markets exhibited heightened volatility today following publishing of GDP data and SC ruling in the AGR case for telecom companies. Global cues were positive following Chinese factory data which indicated demand increasing. Liquidity, driven by high FII inflows in August, has provided good support for the markets, in spite of general concern regarding high valuations in some sectors and stocks."

India's August Manufacturing PMI stood at 52 (MoM) versus 46 in July, signalling growth for the first time in five months, while the core sector reposted a contraction of 9.6% for the month of July 2020 as against a contraction of 12.9% in June 2020.

"SC verdict giving a ten-year time frame for payment of AGR dues with 10% upfront payment can be regarded as reasonably fair," said Dr V K Vijaya Kumar, Chief Investment Strategist at Geojit Financial Services.

Although, mixed cues from European and Asian markets kept gains checked. Equities overseas were trading mixed on Tuesday amid bleak PMI and manufacturing data. Wall Street stocks also closed mixed on Monday as decline in bank stocks pressured both the Dow and S&P 500.

Keshav Lahoti, Associate Equity Analyst, Angel Broking said, "Global cues were mixed as Nasdaq Futures was up by 0.98% whereas Dow Futures and FTSE were down by 0.05% and 1.14% respectively."

Traders said gains were also checked amid rising coronavirus cases in the nation. India reported 78,512 new COVID-19 infections, taking the death toll to 64,617 and total coronavirus cases to 36.21 lakh as of Monday. Worldwide, there were 256 lakh confirmed cases and 8.54 lakh deaths from COVID-19 outbreak.

Meanwhile, Indian rupee, the currency benchmark, ended at 72.86 per dollar as against its earlier close of 73.61 per US dollar, backed by positive equities and a weak dollar.

Technical Insights

On the technical front, the 50 stock barometer Nifty crossed major resistance placed near 11,400 mark and closed at 11,470, while Sensex, the 30 scrip index on BSE ended at 38,900, after hitting 39,226 earlier in the session.

Commenting on Nifty near term technicals, Aamar Deo Singh, Head Advisory, Angel Broking said, "Nifty has crucial support seen around 11,300 levels whereas immediate resistance for the Index is seen around 11,600 levels. Sustaining above that is every essential for any meaningful upside to materialize in the coming days."

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Share Market Highlights: Sensex ends 272 points higher, Nifty at 11,470; Bajaj Finance, JSW Steel, Airtel top gainers