Domestic equity benchmarks the Sensex and the Nifty snapped a four-day losing streak to end in the green on July 15, tracking recovery in the major global markets.
Even though concerns over rigid inflation, aggressive rate hikes and the likely recession persisted, investors picked stocks available at cheaper valuation after the recent drubbing.
Some analysts now believe that the US Fed will raise rates but take a pause after October in order to save the economy from entering into a prolonged recession.
Crude oil benchmark Brent Crude traded below the $100 a barrel mark. The rupee ended flat at 79.88 per dollar.
Sensex ended with a gain of 345 points, or 0.65%, at 53,760.78 while the Nifty closed at 16,049.20, up 111 points, or 0.69%.
Shares of Hindustan Unilever, Titan, Maruti Suzuki, Larsen & Toubro, HDFC and Mahindra & Mahindra ended as the top gainer in the Sensex index. Tata Steel, Power Grid, HCL Tech, Wipro, Dr Reddy's Labs and Axis Bank ended as the top losers.
"Volatility has re-emerged and investors have turned their focus on upcoming Fed policy in the backdrop of heightened US inflation. Fall in crude prices and reduction in FII selling added optimism to the domestic market while gloomy IT results, depreciating rupee and fear of global recession are restricting sizeable up move," said Vinod Nair, Head of Research at Geojit Financial Services.
BSE Midcap index ended 0.84% higher while the Smallcap index closed 0.52% higher.
Among the sectoral indices, BSE Auto emerged as the top gainer, rising 2.34%. BSE Consumer Durables (up 1.56%), FMCG (up 1.48%), Capital Goods (up 1.47%), Telecom (1.35%), Industrials (up 1.32%) and Consumer Discretionary Goods & Services (up 1.32%) also logged healthy gains.
For the week, Sensex (down 1.32%) and Nifty (down 1.06%) fell more than a percent each while BSE Midcap (up 0.88%) and Smallcap (up 0.54%) indices ended in the green.
The market will continue to react to the earnings and global cues while macroeconomic prints will also be on investors' radar.
"Markets will first react to the banking major, HDFC Bank, numbers in early trade on Monday. Besides, the performance of the global indices especially the US markets and movement in crude will remain on participants’ radar. Amid all, we recommend continuing with a positive yet cautious approach till Nifty holds 15,900 and focusing more on stock selection," said Ajit Mishra, VP - Research, Religare Broking.
"Markets will continue to react to global macro factors like inflation, interest rate measures, currency and commodity movement. With the start of the April-June 2022 quarter result season, we can expect stock and sector-specific action over the next one month," said Shrikant Chouhan, Head of Equity Research (Retail) at Kotak Securities.
As per Rupak De, Senior Technical Analyst at LKP Securities, momentum indicators have ended with a bullish crossover. Over the short term, the Nifty may move towards 16,170-16,200. On the lower end, support is visible at 15,900-15,850.
Deepak Jasani, Head of Retail Research, HDFC Securities pointed out that a move above 16,200-16,250 attracts sellers (especially FPIs) into the market.
"A breach of 16,275 would be required to gain further upward momentum while a move below 15,886 could portend further bearishness. While quite a few negatives are getting discounted fast, the flow of fresh negatives needs to stop for a sustainable rise in markets," said Jasani.
Disclaimer: The views and recommendations made above are those of individual analysts and not of MintGenie.