Ending in the green for the sixth consecutive session, equity benchmarks the Sensex and the Nifty clocked decent gains on July 22 amid broadly positive global cues.
Market sentiment remained upbeat on buying by foreign portfolio investors (FPIs) while the fall in crude oil prices and gains in the rupee also influenced sentiment.
Brent Crude traded near the $100 a barrel mark while the rupee gained 10 paise to close at 79.85 per dollar.
Sensex gained 390 points, or 0.70%, to end at 56,072.23 with 18 stocks in the green and 12 stocks in the red. Shares of UltraTech Cement (up 5.03%), HDFC (up 2.37%) and HDFC Bank (up 2.34%) ended as the top gainers while those of Infosys (down 1.73%), NTPC (down 1.19%) and Power Grid (down 0.83%) ended as the top laggards in the Sensex index.
Nifty50 closed 114 points, or 0.69%, higher at 16,719.45. Mid and smallcaps underperformed as the BSE Midcap index fell 0.17% while the Smallcap index ended 0.21% higher.
"Falling crude oil prices and rebound in FII inflows into the domestic market helped benchmark Sensex to close above the psychological level of 56000. The fear of aggressive rate hikes by both the US Fed and RBI seems to be moderating, which is giving investors some room to lap up stocks of companies with good fundamentals," said Amol Athawale, Deputy Vice President - Technical Research, Kotak Securities.
Banking and financial indices rose more than a percent each while IT, telecom and power indices fell about a percent.
"Increased foreign investment and solid quarterly results are increasing domestic demand. Among broad-based buying, banking stocks outshined due to healthy quarterly earnings. European markets traded with modest gains, while investors digested the latest ECB monetary policy as it joined the global peers in policy tightening," said Vinod Nair, Head of Research at Geojit Financial Services.
In the last six days of gains, Sensex and Nifty have jumped almost 5% each and the market capitalisation of BSE-listed firms has shot up to ₹261.09 crore from ₹250.66 lakh crore on July 14, making investors richer by ₹10.43 lakh crore.
"Equity market seems to have received support from the hope of peaking inflation amid a decline in commodity prices and a slowdown in FII selling. In fact, FIIs have been buyers for some days so far in July 2022. US 10-year bond yield is now below 3% and crude oil prices continue to hover around the $100 / barrel mark,” said Shrikant Chouhan, Head of Equity Research (Retail) at Kotak Securities.
Going forward, the market is expected to react to the US Fed meet outcome, the rupee's movement and June quarter earnings.
Deepak Jasani, Head of Retail Research, HDFC Securities said 16,794 could be the next resistance in the near term while 16,588-16,627 could provide support. An upward breach of 16,794 could lead the Nifty to the 16,889-16,958 band, he added.
Rupak De, Senior Technical Analyst at LKP Securities said the Nifty has been moving higher while remaining around the upper band of the rising channel on the daily timeframe.
"The trend remains positive, however, the proximity to the resistance level attracts selling pressure in the market. Over the short term, the Nifty may witness a consolidation. On the lower end, support is visible at 16,500 while resistance is likely to be there at 16,750-16,800," said De.
Disclaimer: The views and recommendations made above are those of individual analysts not of MintGenie.