Nifty closes above 20,000 for 1st time; PSU bank stocks surge

by The Technical Blogs


Benchmark stock market indices ended Wednesday’s trading session on a positive note after a strong rebound.

The S&P BSE Sensex rose 245.86 points to 67,466.99, while the NSE Nifty 50 gained 76.80 points to settle above 20,000 for the first time. Broader markets, especially the Nifty SmallCap 100, registered a strong rally.

High-weightage sectoral indices such as Nifty Bank and Nifty Financial Services ended in positive territory after registering a strong comeback during the trading session. Nifty PSU Bank rose over 4.23 per cent today, as shares of public lenders such as PNB, IOB, Central Bank and PSB gained sharply.

As the Nifty PSU Bank hit a 52-week high, Santosh Meena, Head of Research, Swastika Investmart Ltd, said, “The Nifty PSU Bank index has broken out to multi-year highs, gaining more than 10 per cent in September alone. The chart pattern suggests that this is just the beginning of a rally, but intermediate corrections cannot be ruled out.”

“Investors can add the top three PSU banks, State Bank of India (SBI), Bank of Baroda (BoB), and Punjab National Bank (PNB), to their portfolios. They can also allocate a small portion of their portfolio to smaller PSU banks, as these stocks are high-beta and have the potential to generate higher returns,” he said.

“The 4,600-4,450 range has become a strong support zone for the Nifty PSU Bank index. If the index sustains above this level, it could move up to the 5,800-6,000 range,” he added.

The top 5 gainers on the Nifty 50 were Coal India, Grasim, Tata Consumer Products, Bharti Airtel and Titan. On the other hand, the top losers were HDFC Life, M&M, Adani Ports, L&T and Cipla.

Going forward, investors are likely to track US inflation data as it will provide insights into the Federal Reserve’s policy review later this month.

Deven Mehata, research analyst at Choice Broking, said, “Following a flat opening, the Nifty continued higher and closed above 20,000 for the first time. Nifty has a strong support near 19,900-19,950 levels. Traders should hold the long position in Nifty with a stop loss of 19,900 levels. If Nifty closes below the mentioned support, we can witness further profit booking. If Nifty crosses 20,110 levels, it can move higher towards 20,200-20,250 levels and above.”

Published On:

Sep 13, 2023


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