Over the five trading sessions ending August 7, the Sensex advanced 0.52%, or 405 points, to close at 78,499, posting gains in three of the five sessions. During the modest rise in the benchmark, 18 stocks in the BSE 500 index advanced in each of the five consecutive sessions from August 3 to August 7. Among them, 15 stocks delivered cumulative returns ranging from 5% to 15% over the period. (Data Source: ACE Equity)
The Indian stock market opened in the green, with Sensex trading flat and Nifty rising above 24,580 on Monday despite rising oil prices and escalating Middle East worries, as strong Q1 earnings boosted investor sentiment.
Sensex opened nearly unchanged at 78,502, while Nifty 50 opened 11 points higher at 24,581 on Monday. This came even as India VIX, which measures volatility in the market, jumped over 5% to 12.82.
Titan, ICICI Bank, Trent and HCL Tech shares were the top gainers on Sensex, rising 0.5-2%. On the other hand, NTPC, Bharti Airtel, NTPC and Bajaj Finance shares fell nearly 1% each to lead losses.
Among the sectors, Nifty PSU Bank rose nearly 1% to lead gains, while Nifty Consumer Durables fell around 0.5%. The overall market breadth was positive, with NSE seeing 1,454 advances against 1,174 declines, while 139 stocks remained unchanged.
What lies ahead for Dalal Street?
Despite the latest worries around US-Iran tensions, the undertone of the market is mildly bullish, said VK Vijayakumar, Chief Investment Strategist at Geojit Investments. He noted that the principal bullish factor is the better-than-expected Q1 results. With the earnings season coming to an end this week, the vast majority of companies have reported earnings growth that has beaten expectations, he said.
“The resilient domestic demand will continue to support revenue and earnings growth in Q2, too. Particularly, the performance of banking and financial services, autos, pharmaceuticals, metals and digital platform companies will continue to be good despite the headwinds like deficient monsoons,” he added.
Deficiency in monsoon has been partly compensated by the good July rains, the analyst noted, adding that FIIs turning buyers in July and continuing their buying in most of the days in August, so far, is another positive factor. These positive factors have the potential to keep the market resilient, according to Vijayakumar.
While the fundamental view remains slightly bullish, the technical charts warrant caution. Friday’s failure to attract enough bearish momentum, has reduced Nifty’s chances of an outright fall to 24,400 or to confirm a bearish trend reversal, said Anand James, Chief Market Strategist at Geojit Investments.
He however noted that the oscillators continue to paint a consolidation picture within the 24,400-24,775 band with 24,570-24,500 emerging as a support band while 24,650-24,690-24,730 pose as upside challenge points.
