Sensex rises as bulls fight to recover lost ground after Monday’s crash

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Indian markets closed higher today led by gains in Bharti Airtel after the Supreme Court gave mobile carriers 10 years to pay dues owed to the government. The NSE Nifty 50 index closed up 0.73% at 11,470.25 while the benchmark S&P BSE Sensex ended 0.71% higher at 38,900.80. Both the indexes shed more than 2% on Monday after a fresh border flare-up between India and China.

Bharti Airtel shares closed up 6.5% while Vodafone Idea ended 13.2% lower, with analysts saying the heavily indebted company may find it difficult to raise enough funds to meet the payment requirements.

Investors also looked past Monday’s data that showed India suffered its worst economic contraction on record and focused on a private business survey that showed domestic factory activity grew in August for the first time in five months.

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Here is what analysts say on today’s market performance:

Ajit Mishra, VP – Research, Religare Broking Ltd

“After the dismal GDP data, market participants are now hoping for more stimulus package announcements from the government. Meanwhile, participants would keep a close watch on India-China border tension and global markets for cues. Indications are in the favor of consolidation. Defensive viz. pharma, FMCG etc tend to do well in such a scenario so traders should plan their positions accordingly.”

Nagaraj Shetti, Technical Research Analyst, HDFC Securities

“After witnessing a sharp weakness on Monday, Nifty showed minor strength on Tuesday amidst a high volatility and managed to close on a decent gains. A small positive candle was formed with minor lower shadow. This pattern indicates an attempt of bulls to regain the lost ground.

The near term trend status remains negative for the Nifty. Today’s upside bounce may be a minor cheering factor for bulls to make a comeback, but the market is expected to reverse down from the highs in the next 1-2 sessions. The recent swing high of 11794 is unlikely to be breached on the upside in the short term. Immediate support is placed at 11365.”

Vinod Nair, Head of Research at Geojit Financial Services

“Indian markets exhibited heightened volatility today following publishing of GDP data and SC ruling in the AGR case for telecom companies. Global cues were positive following Chinese factory data which indicated demand increasing. Liquidity, driven by high FII inflows in August, has provided good support for the markets, in spite of a general concern regarding high valuations in some sectors and stocks. The market is expecting a slow uptick in economic activity which has resulted in stock specific moves, where there is earnings visibility. Investors need to be prepared to handle volatility in the near term.”

Manish Hathiramani, Index Trader and Technical Analyst, Deen Dayal Investments

“The markets have closed well over the 11300 level – this is heartening! We need to get past 11600 on a closing basis to indicate that the uptrend has resumed again. If we are successful in doing that, 11800-12000 could be the next potential target for the Nifty. The support is at 11300.”

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