Who moved my market: Market Movers: Banks, pharma stocks surge on RBI move; 31 stocks give buy signals

The central bank today held an unscheduled policy meeting to announce a set of measures to provide relief to borrowers and certain sectors dogged by the second wave of Covid-19 infections.

One of the measures not announced by the central bank was a blanket moratorium on loan repayment on the lines announced after the national lockdown. This gave investors comfort on the asset quality of banks and eased concerns over the impact of the second wave on the economy.

For the day, the Nifty50 index ended 0.8 per cent or 121.35 points higher at 14,617.85, while the BSE Sensex closed at 48,677.6, up 424 points or 0.9 per cent.

Here are the major movers in today’s session:
Banks rejoice lack of moratorium
Shares of banks ended sharply higher as investors were relieved that the central bank did not announce another round of moratorium on loan repayments for the entire economy. The lack of announcement also assured investors that the RBI does not see the current stress in the system to be of the magnitude that was expected after the national lockdown last year. The Nifty Bank index ended 1.6 per cent higher.

Pharma stocks rally on RBI move
Shares of pharmaceutical companies rallied sharply after the central bank said that vaccine manufacturers can tap into the Rs 50,000 crore liquidity support extended to Covid-affected sectors for the next three years. Investors expect the move to help vaccine manufacturers boost capacity, which could spur demand for raw materials and intermediates used in their manufacturing. The Nifty Pharma index surged 4 per cent.

gains despite MSCI-linked selling
Shares of the commodity producer rose nearly 4 per cent despite hefty selling by MSCI-linked exchange-traded funds in the last half an hour of trade. The gains were largely built on the perception that the stock could now participate in the broader metal rally since the overhang of MSCI-linked selling was now over.

Adani Ports slumps on profit booking
Shares of Adani Ports and Special Economic Zone ended 4 per cent lower as investors booked profits after the recent gains in the stock. Shares of the company had seen strong gains in the run-up to its March quarter earnings announcement on Tuesday.

What gave the buy signals?
As many as 31 stocks listed on the National Stock Exchange gave buy signals based on the MACD indicator, including Lupin, Adani Enterprises, Somany Ceramics, and

.

What’s ahead for the market?
Traders sold most out-of-money Call and Put options, suggesting that they do not expect today’s gains to sustain in the coming days. In the futures segment, traders participation was muted in the May contract of the index as open interest rose merely 0.3 per cent on a provisional basis.

“We feel the timely intervention by the apex bank has relieved the participants to some extent amid the prevailing uncertainty. However, it failed to trigger a decisive move in the benchmark indices and we might see further consolidation,” said Ajit Mishra, vice president of research at Religare Broking.