Equities rebounded on Thursday in a choppy trading session,buoyed by banking and financial stocks,as the November series derivative contracts expired amid largely positive cues from global markets. The Sensex rallied 431.64 points (0.98%) to close at 44,259.74 while the Nifty jumped 128.6 points (1%) to close at 12,987. The Nifty Bank outperformed the benchmarks as it rose 1.2%.
Volumes during Thursday’s monthly expiry remained high with the NSE’s futures and options segment witnessing a turnover worth Rs 72.57 lakh crore. The six-month average of the equity derivatives segment stands at Rs 19.2 lakh crore. The markets rallied because of short covering ahead of monthly expiry and the rebalancing of MSCI portfolios.The volumes in the equities derivatives segment were the highest ever
Siddhartha Khemka, head – retail research, Motilal Oswal Financial Services, said:“On the domestic side,short covering ahead of November 2020 futures and options segment expiry and rebalancing of MSCI portfolios helped the markets to recover sharply from the lower levels.”The cash market’s turnover was Rs 61,370.51 crore, against the six-month average of Rs 52,327.79 crore.
The markets recovered from the volatility they saw in the last hour of trade as the global cues remained mostly positive.The European markets,however,were trading mixed,with the benchmark in Germany trading 0.05% higher. France and the UK markets were down by 0.07% and 0.44%. The markets in China, Hong Kong and South Korea were up by 0.22% to 0.94%.
Foreign portfolio investors (FPIs) bought stocks worth $270 million while domestic institutional investors sold stocks worth $453.3 million. This month,the FPI buying has been the highest ever,with foreign brokerages turning increasingly bullish towards Indian equities. The FPI buying till November 24 was at $8 billion.
The mid and small cap stocks are also expected to out perform going forward. On Thursday,both the Nifty midcap 100 and Nifty smallcap 100 were up by 0.86%.The Q2FY21 earnings as well as the outlook beat expectations for most small and midcaps (SMIDs) and have led to many brokerages upgrading earnings of this universe of companies. Edelweiss Securities said, “Importantly, this led to 5–20% earnings upgrades for FY22 for nearly 63% of our coverage SMIDs; another 10% of SMIDs wallowed in more than 20% earnings upgrades.”