Sensex up 250 points, Nifty regains 8,650 on 1st day of Feb F&O series

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The benchmark indices continued to trade higher on the first day of February derivative series  tracking global markets, which thrived after Dow Jones, the closely-watched index on Wall Street, closed above its fresh lifetime high of 20,000-mark for the second day straight.

At 11:42 am, the S&P BSE Sensex was trading at 27,962, up 250 points, while the broader Nifty50 was ruling at 8,670, up 68 points.

In the broader market, the BSE Midcap and BSE Smallcap indices rallied 1.2% and 0.9%, respectively.

“It’s quite possible that we may see profit booking or breather in coming days, but traders shouldn’t expect any major reversal soon. The trend is quite strong and one should look to ride this tide. For the coming session, 8,560-8,500 would now be seen as a strong support zone; whereas on the higher side, a move towards 8,678-8,737 is clearly visible now,” said Angel Broking in a technical note.

Meanwhile, as per provisional figures, foreign institutional investors bought shares worth Rs 1378.81 crores on Wednesday, while domestic institutional investors sold shares worth Rs 383.03 crores on that day.

Market was closed on Thursday to observe Republic Day celebrations.

Buzzing stocks

Gail (India) hit a new high of Rs 494, up 4% and was the top Sensex gainer after the company announced bonus issue of 1:3 (1 share for every three shares held) and 85% interim dividend.

Dredging Corporation of India rose nearly 4% to hit its 52-week high of Rs 496 after the company said it received 102 crore international contract for dredging in Pussur Channel from Mongla Port to Rampal Power Plant, Bangladesh.

Power Grid Corporation gained nearly 2% to Rs 206.90 after the Central transmission utility entered into a pact with Abu Dhabi Water & Electricity Authority for cooperation in areas like smart grid, transmission technology and distribution.

Among losers, Wipro lost 1% to Rs 468 and was the tpp Sensex loser after the IT major reported an 1.80% quarter-on-quarter rise in consolidated net profit in December quarter at Rs 2,109.60 crore compared with Rs 2,070.40 crore posted in the September quarter.

Rollover analysis

Against all the odds Nifty ended the January series on a strong note gaining nearly 6.2%. The market-wide rollovers stood at 77% as compared to average rollovers of 78% in the last three series. Nifty futures rollover came in at 73% which is higher than the average rollovers of 68% in the last three series. The quantum of leverage has also risen sharply, said brokerage Edelweiss Securities in a technical note.

“Needless to mention, the scope for disappointment from the Union Budget has narrowed than ever before.  Key events to watch out would be the Union Budget, events leading to the State elections and the Q3FY 17 earnings. Moreover with Trump assuming office, there would be no dearth of action,” the brokerage added.

Global markets

Asian shares were steady on Friday. MSCI’s broadest index of Asia-Pacific shares outside Japan was little changed. Japan’s Nikkei rose 0.3%.

South Korean markets are closed for holidays on Friday and Monday. Chinese markets are shut for the Lunar New Year holiday and will resume trade on Friday, February 3. Taiwan is also closed for Lunar New Year and will reopen on Thursday, February 2.

Overnight on Wall Street, the Dow Jones Industrial Average rose 0.2%, remaining above the 20,000 level topped on Wednesday. The S&P 500 and the Nasdaq hit record highs during the session but inched back down to close little changed after two days of strong gains.