Taking Stock | Bulls tighten control as markets hit fresh record high; Nifty above 18,800

The Indian equity benchmarks scaled fresh record highs while extending the winning run to an eighth straight session on December 1, on hopes of smaller interest rate hikes by the US Federal Reserve going ahead.

At close, the Sensex was up 184.54 points or 0.29 percent at 63,284.19, while the Nifty rose 54.20 points or 0.29 percent at 18,812.50.

Federal Reserve Chair Jerome Powell said the central bank might scale back the pace of its interest rate hikes as soon as December .

Market started December on a strong note, and held the gains in the first half. However, some profit booking in the second half erased some intraday gains but it managed to end on positive note.

Also Read: RBI seen raising rates by smaller 35bps in December, hiking again in early 2023: Poll

Stocks and sectors

UltraTech Cement, Tata Steel, Hindalco Industries, TCS and Grasim Industries were among the top Nifty gainers. The losers included ICICI Bank, Eicher Motors, UPL, Cipla and Bajaj Auto.

Among sectors, Nifty PSU Bank index surged 2 percent, information technology index added 2.4 percent and metal index gained 1.5 percent. Some selling was seen in the auto, energy, FMCG and pharma sectors.

The BSE midcap and smallcap index added 0.6 percent each.

On the BSE, the IT index rose 2 percent, metal index up 1.7 percent, realty index rose nearly 2 percent. However, selling was seen in the power, oil & gas, auto and FMCG names.

Among individual stocks, a volume spike of more than 300 percent was seen in L&T Technology Services, Rain Industries and Piramal Enterprises.

A long build-up was seen in L&T Technology Services, Birlasoft and Mphasis, while short build-up was seen in Indraprastha Gas, Granules India and Shriram Transport Finance Corporation.

L&T, DCB Bank, Cummins India, Bharat Heavy Electricals, Karnataka Bank, Apollo Tyres, KRBL, Suzlon Energy, Elecon Engineering, Likhitha Infrastructure, JK Lakshmi Cement, touched their 52-week high.

Outlook for December 2

Ajit Mishra, VP – Technical Research, Religare Broking

Markets managed to end marginally higher amid volatility on the weekly expiry day. Firm global cues triggered a gap-up start in Nifty however profit taking at the higher levels trimmed the gains as the day progressed. Finally, the Nifty index settled at 18,812.5 levels.

Among the sectoral pack, IT, metal and realty remained in flavour while energy, auto and FMCG were slightly on the back foot. Amid all, the broader indices outperformed the benchmark and posted decent gains.

We may see a bit of consolidation after the recent surge. However, upbeat global cues would keep the tone positive. Besides, improvement in the broader market participation is added relief. Participants should continue with a positive bias and utilise pause or dip as a buying opportunity. At the same time, one should not go overboard and stick largely with the index majors and quality midcaps.

Gaurav Ratnaparkhi, Head of Technical Research, Sharekhan by BNP Paribas

Continuing with the positive momentum from the last session, the Nifty opened gap up on December 1. Post that, it witnessed a brief consolidation throughout the day. Nevertheless, the index managed to post a positive daily close for eighth consecutive session.

Expansion in the hourly & the daily upper Bollinger Bands is supporting the price action on the way up. The overall structure shows that the index can continue with the uptrend & head towards the short term target of 19,000. On the other hand, the zone of 18,700-18,600 will act as a support as per the principle of role reversal.

Shrikant Chouhan, Head of Equity Research (Retail), Kotak Securities

Although markets extended gains and scaled fresh highs once again, the recent upsurge failed to gather steam today, as indices closed off their highs due to flattish cues from other Asian and European peers. While the undertone remains bullish, the focus will now shift to next week’s credit policy announcement.

Most of the positive factors are still intact, but if the rate hike is above expectations, it could trigger a sharp sell-off in the near term.

Technically, the Nifty has formed a small bearish candle on daily charts indicating indecisiveness between the bulls and bears. While the larger texture of the market is bullish, due to temporary overbought conditions we could see some profit booking at higher levels.

For traders, 18,700 and 18,650 could act as key support zones whereas 18,900-19,000 would be the key resistance levels.

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