Market benchmarks the Sensex and the Nifty snapped a three-day losing run on October 12 amid mixed global cues.
Investors now shift focus to September quarter earnings with hopes that the numbers will be healthy enough to sustain the market's current valuation.
Nifty's current price-to-earnings ratio (PE) is 21.5 times, slightly above its long-term average of 20 times.
Sensex rose 479 points, or 0.84%, to end at 57,625.91 while the Nifty closed at 17,123.60, up 140 points, or 0.82%. Mid and Smallcaps underperformed as the BSE Midcap index ended 0.66% higher while the Smallcap index rose 0.22%.
The overall market capitalisation of BSE-listed firms rose to ₹271.6 lakh crore from ₹270.1 lakh crore in the previous session, making investors richer by ₹1.5 lakh crore in a single session.
"The domestic market successfully overcame the weak cues from global peers as it focused on quarterly earnings. The IT earnings season got off to a strong start, which improved the sector's spirits,” Vinod Nair, Head of Research at Geojit Financial Services, observed.
Shares of Power Grid, Axis Bank, NTPC, IndusInd Bank, Larsen & Toubro and UltraTech Cement ended as the top gainers in the Sensex index.
Only five stocks - Asian Paints, Dr Reddy’s Labs, Bharti Airtel, Titan and ICICI Bank - ended in the red in the 30-share pack Sensex.
Among the sectoral indices, BSE Realty, Power, Bankex and FMCG ended over a percent higher each.
More than 110 stocks, including IDFC, IDFC First Bank, Kalpataru Power Transmission, Raymond, LT Foods, Chalet Hotels and Ujjivan Financial Services, hit their fresh 52-week highs in intraday trade on BSE.
Today’s gains may be short-lived as the headwinds persist and analysts expect the market to remain volatile in the near term.
“Bears took a breather today as markets witnessed a relief rally after getting hammered in the past few sessions. However, the recovery doesn't seem to be sustainable as multiple negative factors are at play,” said Shrikant Chouhan, Head of Equity Research (Retail) at Kotak Securities.
“We feel it’s just a respite in a corrective phase and the tone would remain negative until Nifty decisively reclaims 17,400. Amid all this, the buoyancy in the banking space is capping the damage so far while others are seeing a mixed trend. We feel it is prudent to stay light in the prevailing scenario and keep the existing positions hedged,” said Ajit Mishra, VP of Research at Religare Broking.
Oil prices dipped slightly due to sluggish demand amid fears of a global recession. The rupee ended a paise higher at 82.31 per dollar.
Technicals
Chouhan observed that the Nifty took support near the 200-day SMA (simple moving average) and bounced back sharply.
“As long as the index is trading above 17,000, the pullback formation is likely to continue. Above this level, the index may touch the level of 17,225-17,275. On the flip side, below 17,000, the index could slip to 16,900,” said Chouhan.
Om Mehra, a technical associate at Choice Broking pointed out that the Nifty formed a bullish candle on the daily chart, as it closed above 17100, an important Fibonacci level.
“The overall structure shows that the index is likely to witness consolidation and short-term buying in the range of 17,000-17,300. Once it sustains 17,340, we can expect a rally to 17,500 in the coming days. Indicators such as RSI and MACD are showing some strength to lead towards the upside in the daily chart,” said Mehra.
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.
