The domestic market continued witnessing buying interest on April 11 as the equity benchmarks the Sensex and the Nifty extended their winning streak into the seventh consecutive session, with banking, financial and metal stocks clocking healthy gains.
Expectations of healthy fourth-quarter earnings, easing inflation, a pause in rate hikes by the RBI, the return of foreign portfolio investors and improving macroeconomic indicators have underpinned market sentiment.
Sensex opened 182 points higher at 60,028.60 and rose 421 points to hit the intraday high of 60,267.68 amid mixed global cues. However, gains in Asian and European peers offered comfort.
While the US markets ended lacklustre overnight, major Asian markets, including Nikkei and Kospi ended over a percent higher. European markets also traded with healthy gains.
Sensex closed 311 points, or 0.52 percent, higher at 60,157.72 while the Nifty50 ended at 17,722.30, up 98 points, or 0.56 percent. Mid and smallcaps also ended higher; the BSE Midcap and Smallcap indices rose 0.40 percent and 0.62 percent respectively.
Over 100 stocks, including ITC, Larsen & Toubro, UltraTech Cement, Bajaj Auto and Dr Reddy's Laboratories, hit their 52-week highs in intraday trade on BSE.
In the last seven sessions of gains, the Sensex has jumped 4.4 percent while the Nifty is up 4.5 percent. The overall market capitalisation of BSE-listed firms has risen up to nearly ₹264.5 lakh crore from ₹251.9 lakh crore on March 28, making investors richer by ₹12.6 lakh crore in just seven sessions.
All eyes are now on the retail inflation data. India and the US are to release their March retail inflation data on April 12. Meanwhile, China's consumer inflation hit an 18-month low.
While last week's US non-farm payrolls data raised concerns that the labour markets remain tight and the Us Fed will go for a 25 basis point rate hike in May, the upcoming inflation data is expected to show a further moderation in inflation, which will be key for the Fed for thinking about a pause.
Crude oil prices traded with gains on expectations of potential economic stimulus by China, healthy demand in the rest of Asia and a drop in US crude stockpiles, reported Reuters.
Brent Crude traded near the $85 per barrel mark. The rupee, on the other hand, slipped 14 paise to close at 82.13 per dollar.
Top Nifty gainers and losers
As many as 38 stocks ended in the green in the Nifty index while 12 ended in the red.
Shares of Kotak Mahindra Bank (up 4.62 percent), JSW Steel (up 3.85 percent) and Eicher Motors (up 2.89 percent) ended as the top gainers in the Nifty index while those of TCS (down 1.79 percent), Infosys (down 1.77 percent) and HCL Tech (down 1.43 percent) ended as the top losers.
IT stocks falter
Most sectoral indices ended with gains while the Nifty IT ended 1.26 percent lower with all components in the red. IT stocks are under pressure as their Q4 numbers are expected to come on a softer side.
Among the gainers, Nifty Metal (up 1.76 percent) emerged at the top.
Nifty Bank (up 1.30 percent), PSU Bank (up 1.61 percent), Private Bank (up 1.15 percent), Financial Services (up 1.08 percent), Auto (up 0.99 percent) and Oil & Gas (up 0.93 percent) ended with healthy gains.
Experts' views on markets
Shrikant Chouhan, Head of Equity Research (Retail) at Kotak Securities pointed out that strong Asian and European market cues bolstered the ongoing bullish sentiment and lifted the Sensex above the crucial 60,000 mark.
"Although the rally seems to be stretched, the feel-good factors like the interest rate status quo by the RBI, robust GST collections and mixed economic growth numbers are giving investors the ammo to bet on domestic stocks," said Chouhan.
Vinod Nair, Head of Research at Geojit Financial Services is of the view that the expectation of strong quarterly earnings following robust business updates boosted market sentiment.
He said that the forthcoming CPI inflation data due on Wednesday may remain below the RBI’s upper tolerance level of 6 percent. In the US, inflation is projected to decline further from its current level of 6 percent.
"The US inflation figures, along with the FOMC meeting minutes, are likely to exert a dominant influence on the global market trend," said Nair.
Technical views on markets
As per Chouhan, on intraday timeframes, the market is holding higher high and higher low formation and after a sharp pullback rally, it is comfortably trading above the 50-day SMA (simple moving average) which is largely positive.
"For the trend-following traders, 17,650 would act as a key support level and above the same, the Nifty could move up to 17,800-17,835. On the flip side, below 17,650 a quick intraday correction is likely, which could pull down the index up to 17,550-17,500," said Chouhan.
Jatin Gedia, a technical research analyst at Sharekhan by BNP Paribas observed that the Nifty, on the daily chart, closed exactly at the resistance zone of 17,700 – 17,730 where the daily upper Bollinger band and the upper end of the falling channel are placed.
"Despite the negative divergence on the hourly momentum indicator, there is no weakness on the price front and the best strategy to trade such an up move is to hold on to the long positions with a trailing stop loss mechanism. For the last seven trading sessions, the Nifty has not dipped below the previous day's low which is an extremely bullish sign and can also be used as a crucial level for holding on to the long positions," said Gedia.
"Crucial support is placed at 17,655 – 17,650 while immediate hurdle is placed at 17,700 – 17,730. Overall, the uptrend is still intact, and we expect Nifty to target levels of 17,800 in the short term," said Gedia.
Key market data
Disclaimer: The views and recommendations given in this article are those of individual analysts. These do not represent the views of MintGenie.