Equity benchmarks the Sensex and the Nifty ended in the green for the second consecutive session on July 7, tracking broadly positive global cues as a fall in crude oil and other commodity prices underpinned sentiment.
Sensex opened 396 points higher at 54,146.68 and touched intraday high and low of 54,254.79 and 53,927.26 respectively, eventually ending at 54,178, up 427 points, or 0.80 percent. Nifty closed the day 143 points, or 0.89 percent, higher at 16,132.90.
As many as 21 stocks ended in the green while the remaining 9 ended in the red in the Sensex index. Shares of Titan (up 5.69 percent), Tata Steel (up 4.88 percent), Larsen & Toubro (up 3.52 percent), IndusInd Bank (up 2.93 percent)and Mahindra & Mahindra (up 2.57 percent) ended as the top gainers in the Sensex index.
On the flip side, Dr Reddy's Labs (down 1.26 percent), Nestle (down 1.14 percent), Bharti Airtel (down 1.05 percent), Reliance Industries (down 1.01 percent), Bajaj Finance (down 0.98 percent) and Hindustan Unilever (down 0.90 percent) ended as the top laggards.
Mid and smallcaps outperformed their larger peers as the BSE Midcap and Smallcap indices rose 1.19 percent and 1.30 percent respectively.
"Buoyancy across global indices and short-covering in local stocks helped benchmark Nifty and Sensex to close above their psychological levels. After the sell-off in recent months, valuations are now off their peak and this is giving investors some room to pick and choose stocks which are fundamentally sound despite the prevailing negative sentiment," said Shrikant Chouhan, Head of Equity Research (Retail), Kotak Securities.
Among the sectoral indices, BSE Metal saw a robust gain of 4.49 percent while the consumer durables index rose 3.24 percent. BSE Realty, Basic Materials and Capital Goods indices rose 2.55 percent, 2.22 percent and 2.01 percent, respectively.
The rupee ended 12 paise higher at 79.18 while the crude oil benchmark Brent Crude traded near the $100 a barrel mark.
"Domestic bourses mirrored an upbeat mood in global equity markets as investors digested the latest FOMC minutes while falling crude and commodity prices lifted investor sentiments. This upside momentum could dominate the markets in the near term, underpinned by hopes of reducing inflation. The RBI’s latest slew of measures to boost foreign exchange inflows is expected to aid the tumbling rupee," said Vinod Nair, Head of Research at Geojit Financial Services.
Technical view
After a promising pullback rally, the Nifty is comfortably trading above the 16,000 mark which is broadly positive. Chouhan pointed out that after the strong uptrend rally, the market, on daily charts, has formed a small hammer candle which is indicating a strong possibility of an intraday correction.
"As long as the index is trading above 16,000, the short-term uptrend formation remains intact. Above 16,000, the index could hit the level of 16,200-16,275. Traders may prefer to exit from long positions if the index trades below 16,000. On further correction, the index could retest the level of 15,950-15,900,” said Chouhan.
Mazhar Mohammad, Founder & Chief Market Strategist, Chartviewindia.in pointed out Nifty is yet to register a close above its critical resistance of 16,172. Hence, unless such a close is witnessed on the index fresh long positions for short-term traders are not advisable. However, on such a close, a strong up move can be unleashed towards its 200-day exponential moving average (16552).
Mohammad said it is critical for the index to sustain above today’s bullish gap zone of 16,045 and 16,011. A close below 16,000 can induce a fresh bout of selling pressure on the index.
"Considering, an indecisive formation on the index, traders are advised to remain neutral on the long side unless the Nifty50 closes above 16,172," said Mohammad.
Disclaimer: The views and recommendations made above are those of individual analysts not of MintGenie.
