Bull run may push Nifty over 12,000 mark, Sensex over 39,500, says expert; check 5 big things from Monday rally

There was a good rally witnessed on the first day of the fiscal (FY20) itself, with Sensex touching an all-time high of 39,115.57 and Nifty 50 above 11,738.10 during trading hours. However, before the indexes can resume the Monday’s trading session, correction was already witnessed making them even more appealing for a bull run ahead. The Sensex finished at 38,871.87 above 198.96 points or 0.51%, while Nifty 50 ended at 11,669.16 above 45.25 points or 0.39%. However, the rupee and bond market were shut today, due to the annual closing of banks. The rally in the domestic market, can be attributed to RBI’s policy meet which will begin from tomorrow. RBI will be presenting India’s first bi-monthly monetary policy of FY20, and many experts have forecasted a 25 basis point cut in repo rate which currently stands at 6.25%. 

Here’s a list of five key takeaways from Monday’s rally on Sensex. 

1. Top gainers!

Major buying sentiment was witness in large cap stocks. The top performers list on Sensex, was led by Tata Motors which gained by a whopping 7.37% at Rs 187.15 per piece, followed by Vedanta at Rs 189 per piece up by 2.86%, Tata Steel at Rs 534.70 per piece higher by 2.66%, Maruti Suzuki at Rs 6,842.85 per piece above 2.57% and Bharti Airtel at Rs 340.25 per piece up 2.21%. 

Other stocks like Reliance Industries, L&T, HCL Tech, Infosys, TCS, SBI, Yes Bank, ITC, Kotak Mahindra Bank, Hero Motocorp and Bajaj Auto also surged in the range of 0.13% to 2%. 

2. Small caps showstopper! 

Among major indexes, it was S&P BSE small caps which witnessed most rally. The index finished at 15,144.40 per piece up by 117.04 points or 0.78%, however, it did touch an intraday high of 15,229.85. 

Stocks like TCPL Packaging, Arshiya Limited, HOV Services, Apollo Micro System, Andhra Bank, Ganesha Ecosphere, HSIL and Godawari Power & Ispat were top performers by rising between 11% to 20% in just 1 day. Most of them even touched an upper circuit in their price levels. 

3. Bull's eye of Capital goods, tech, metal stocks!

It was S&P BSE IT stocks which surged the most compared to other sectors. The index finished at 15,531.98 up by 251.68 points or 1.65%. Gainers here were HOV Services, TVS Electronics, Mastek, Intellect, Ramco System and 8K Miles which rose between 5% to 20 %.

Second was S&P BSE Capital Goods which also jumped by 251.33 points or 1.36% to 18,723.32. Top performers here were - Graphite, BEL, ELGI Equipments, L&T, Kalpataru Power and HEG up between 1.50% to 3%. 

Finally, the S&P BSE Metal finished at 11,592.61 higher by 237.49 points or 2.09%. Stellar performers were - Hindalco, Vedanta, Tata Steel, SAIL, Hindustan Zinc and National Aluminium rising between 2% to over 5%.

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4. Crude Oil uptrend!

On Monday, the international crude oil surged, building on its largest first-quarter gains in nearly a decade, as tight supply and positive signs for the global economy supported prices, as per Reuters. 

By 0900 GMT, the brent crude was up 96 cent or 1.42% for June delivery, to  $68.54 a barrel, resulting in 27% rise in the January-March period. Meanwhile, the U.S. West Texas Intermediate futures was up by 56 cents or 0.93% to $60.70 a barrel. In the first quarter, WTI gained by 32%. 

5. Global Markets rally!

According to Reuters report, global stocks surged on Monday, extending gains from their best quarter since 2010, as strong Chinese factory activity data and signs of progress in U.S.-China trade negotiations gave investors reason to cheer.

Reportedly, European stocks posted their best daily gains since mid-February, with the pan-European STOXX 600 index up 0.8 percent. Germany`s trade-sensitive DAX outperformed with a 1 percent rise, helped by gains in automaker stocks. MSCI`s All-Country World Index, which tracks shares in 47 countries, was up 0.4 percent on the day. It had just posted its best quarter since 2010. S&P 500 futures were up about 0.7 percent, indicating a higher open on Wall Street.

Where is Nifty, Sensex headed? 

Talking about Monday’s performance, Mustafa Nadeem, CEO, Epic Research said, “This was bound to happen as the force behind the trend looks intact for the further gains that may push Nifty to touch beyond 12K mark and Sensex beyond 39500. Lower inflation, lower interest rate scenario, dovish stance from Fed reserve and liquidity-driven markets, all these factors are favouring the current scenario.”

Going forward, Nadeem says, “We believe there may be some minor profit booking in the short term as the hurdle placed at 39K and 11750 levels. Dalal Street is also looking forward to RBI meet in this week and expects a rate cut. This has further pushed bullish sentiment and now almost any dip is being utilized for buying at lower levels.  We remain to buy on dips with a target of 39500+ levels in Sensex.”