Market Wrap: Sensex, Nifty rise over a percent each; IT, bank, metal stocks shine

Across-the-board buying boosted the Indian market on July 18 as investors resorted to bottom fishing to pick stocks at cheaper valuations.

Sentiment improved as the strong US retail sales data underpinned hopes that the US Fed may soften its stance on rate hikes. However, concerns over inflation and a looming recession persist.

Sensex closed 760 points, or 1.41%, higher at 54,521.15 while the Nifty rose 229 points, or 1.43%, to 16,278.50. BSE Midcap index closed 1.49% higher while the smallcap index rose 1.39%. Among the sectoral indices, IT, bank and metal indices rose up to 3%.

In the 30-share pack Sensex, 23 stocks ended in the green.

Shares of IndusInd Bank, Infosys, Tech Mahindra, Bajaj Finserv, Axis Bank and Kotak Mahindra Bank ended as the top gainers in the Sensex index. On the flip side, shares of Dr Reddy's Labs, HDFC Bank, Mahindra & Mahindra, Maruti and Nestle ended as the top laggards.

"Strong US retail sales data scaled down the worries of an aggressive rate hike higher than 75bps providing the much-needed optimism to global equities. The European Central Bank, in its meeting this week, is set to increase its interest rates for the 1st time to contain record-high inflation. On the domestic front, while IT and banking stocks were lifted by bottom fishing, realty stocks accumulated gains on improving business prospects," said Vinod Nair, Head of Research at Geojit Financial Services.

As per Ajit Mishra, VP - Research, Religare Broking, markets are largely mirroring their global counterparts, especially the US while domestic factors like macroeconomic data and earnings cause volatile swings in between.

"We reiterate our positive yet cautious view as we’re eyeing the 16,300-16,500 zone in Nifty. Participants should focus more on stock selection and overnight risk management," said Mishra.

Technicals

Shrikant Chouhan, Head of Equity Research (Retail), Kotak Securities pointed out that 16,150-16,200 would act as a strong support zone and above the same, the index could hit the level of 16,400-16,450. On the flip side, below 16150, the uptrend would be vulnerable.

Mazhar Mohammad, Founder & Chief Market Strategist, Chartviewindia.in underscored Nifty not only closed above its recent corrective swing high of 16,275 but also erased all the 4-day old losses from the high of 16,275 and 15,858 in just two trading sessions.

"This faster retracement may be hinting at the further expansion of the current pullback swing. Hence, sustaining above the day’s bullish gap zone placed between 16142 and 16067, the Nifty can eventually head to test its 200-day EMA, placed around 16,525. Therefore, any dip in the early part of the trading session can be an opportunity for short-term traders to create fresh long positions," said Mohammad.

Disclaimer: The views and recommendations made above are those of individual analysts not of MintGenie.