Global rally post US jobs data lifts Sensex 611 pts, Nifty above 10,400; FMCG leads

Bulls were back with vengeance to cover the lost ground at Dalal Street on Monday as benchmark indices gained nearly 2 percent, driven by global rally after better-than-expected US jobs data. Investors awaited February CPI inflation and January industrial output data due later today. The market had lost more than 2 percent last week.

Short covering triggered in later part of the session and almost all the sectoral indices participated in the rally. In fact, the Nifty PSU Bank index trimmed losses to half a percent from 3 percent.

The 30-share BSE Sensex saw the biggest one-day gain in last 17 months, rising 610.80 points or 1.83 percent to close at 33,917.94.

The 50-share NSE Nifty saw the biggest single day percentage gains for the first time in last 22 months, up 194.50 points or 1.90 percent at 10,421.40.

“It was indeed a surprise up move but sustainability above 10,400 will be crucial for further recovery,” Jayant Manglik, President, Religare Broking said.

He suggests traders limiting leveraged positions and continuing with stock specific trading approach.

“Nifty close above 10,350 gives more space for a target of 10,535 – the next possible resistance,” Prashanth Tapse, Associate VP, Mehta Group said.

On the global front, Asian stocks got off to a strong start to the week, with regional markets closing higher following positive lead from the Wall Street on expectation-topping US jobs data. Japan’s Nikkei, Hong Kong’s Hang Seng and South Korea’s Kospi gained 1-2 percent.

European stocks were also trading higher as France’s CAC gained 0.3 percent and Germany’s DAX was up 0.6 percent at the time of writing this article.

Midcaps also participated in the rally and recovered sharply from day’s low, but still underperformed frontliners. The Nifty Midcap index was up 1 percent despite balanced market breadth.

About 1,381 shares advanced against 1,341 declining shares on the BSE. Only three stocks out of Nifty50 ended in the red.

FMCG index gained the most, rising 2.6 percent followed by Bank, Auto, IT, Metal and Pharma that rallied 1-2 percent.

ITC was the leading contributor to Nifty50’s gains, rising 4.2 percent after the GST Council kept tax rates on cigarettes unchanged in its meeting on Saturday.

United Spirits also reacted positively to the latest GST Council meet as extra neutral alcohol (ENA) was not brought under GST net. The stock was up 5.5 percent.

Tata Motors rallied 3.25 percent. Motilal Oswal has maintained its Buy call on the stock with a target price at Rs 515, implying 51 percent upside after JLR wholesales data.

Bharti Airtel was biggest loser among Nifty50 stocks, rising 4.82 percent after the telecom operator’s board approved fund raising up to Rs 10,000 crore through non-convertible debentures on private placement basis.

L&T gained 1.5 percent after its subsidiaries bagged orders worth Rs 3,039 crore whereas Aurobindo Pharma lost 1.6 percent after the US Food and Drug Administration officials found a ‘large female mosquito’ in Unit 4 during inspection between February 12-20.

Coal India was down 2.1 percent after the miner’s board of directors approved payment of interim dividend for the current fiscal at a rate of Rs 16.50 per share.

Among others, IOC, HDFC, Reliance Industries, ICICI Bank, Vedanta, Infosys, Axis Bank and Maruti Suzuki gained up to 4 percent.

Radico Khaitan, Graphite India, HEG, Hitachi Home, Jaiprakash Associates, Jaiprakash Power, Jindal Steel, JSW Steel, Suzlon Energy, SAIL, Fortis Healthcare, GMR Infrastructure, Reliance Capital and Mahindra Logistics gained up to 19 percent.

Andhra Bank cut losses to 6 percent from 13 percent. The Enforcement Directorate filed a charge sheet against a former bank director in an alleged Rs 5,000-crore bank fraud case involving a Gujarat-based pharma firm Sterling Biotech.

IDBI Bank, Bank of India, Union Bank, PFC, REC and Bajaj Hindusthan fell up to 8 percent.