The Indian stock market traded in green on Monday, with Sensex and Nifty gaining 0.5% each, after the sharp crash seen in the previous session.
Sensex gained 427 points at 75,203 while Nifty 50 gained 107 points at 23,654 during Monday's trading session. This comes as India VIX, which measures volatility in markets, declined more than 3% to 15.64.
IndiGo shares were the top gainers on Sensex, jumping more than 4.5% after their Q4 results. Infosys, Asian Paints, TCS, Tech Mahindra, HCL Tech and Reliance Industries (RIL) shares followed, gaining 1-3%. Bucking the trend, NTPC, Kotak Mahindra Bank and Axis Bank shares declined around 1% each.
Broader markets also opened in the deep green, with Nifty Midcap 100 index gaining more than 0.5% and Nifty Smallcap 100 index rising 0.8%. Sectorally, Nifty IT jumped more than 2% to lead gains while Nifty FMCG and Nifty Private Bank slipped into the red. Around 1,823 stocks advanced on NSE, while 841 declined and 125 remained unchanged.
“With the uncertainty over the US-Iran deal continuing and Brent trading at about $93, there are no major triggers for the market at the start of this week. A significant market trend since the start of the West Asia conflict on February 28th is the outperformance of the broader market, which, in turn, was led by better-than-expected Q4 results. Expectations of good results from mid and small caps and sustained selling in large caps by the FPIs have widened the gap in valuations between large caps and the broader markets. Large caps are now fairly valued and valuations in segments like banking are attractive. But this segment will test the patience of investors,” said VK Vijayakumar, Chief Investment Strategist at Geojit Investments.
He highlighted that the 1.5% crash in Nifty and Sensex last Friday was due to the MSCI rebalancing and the consequent passive outflows. Therefore, this need not be taken as a trend. “Watch out for the May auto sales numbers which will influence stock prices in the segment. Expectations surrounding the monetary policy on June 5th and the RBI commentary on growth and inflation will influence the market trend this week,” he added.
Rupee opened at 94.97 against the US dollar, nearly unchanged from the previous closing level of 95. The Indian currency has recovered sharply after a long streak of hitting fresh lifetime lows and nearing 97-mark against the US dollar.
“Lower crude prices have eased concerns over India's import bill and provided support to the domestic currency. Technically, rupee has immediate resistance near 94.60, while 95.30 remains an important support zone in the near term,” said Jateen Trivedi, VP Research Analyst of Commodity and Currency at LKP Securities.
Foreign investors remained strongly bearish on the Indian stock market, net selling Indian equities worth Rs 21,105.86 crore on Friday, according to data on NSE. This is the highest single day net selling by FII in May.
