The Indian stock market began the new week in the green, with Sensex and Nifty extending gains on Monday as oil prices slipped ahead of US announcement of fresh sanctions on Iran.
Sensex gained over 200 points to 77,756 after opening, while Nifty 50 rose around 50 points to 24,301. Broader markets also opened in the green, with Nifty Midcap 100 and Nifty Smallcap 100 indices gaining up to 0.2%.
Infosys, HDFC Bank, Tata Steel, IndiGo, Maruti Suzuki and M&M shares gained nearly 1% each to lead gains on Sensex, while Adani Ports, Asian Paints, Bajaj Finance and few other stocks recorded marginal losses. Amid the optimism, India VIX, which measures volatility in the market, dropped more than 3% to 10.83 in the morning.
Among the sectors, Nifty Metal and Nifty IT gained nearly 1% each, while Nifty Pharma dropped around 1% in morning trade. The overall market breadth turned positive, with NSE seeing 1,836 advances and 802 declines, while 189 stocks remained unchanged.
What lies ahead?
In the near-term the market is likely to move within the Nifty range of 24,200-24,600, said VK Vijayakumar, Chief Investment Strategist at Geojit Investments. He noted that there are fundamental triggers for a rally coming particularly from the resilient economy and improving earnings growth. But a breakout beyond 24,600 is unlikely since there are headwinds like elevated crude oil prices (Brent around $93) and escalating geopolitical tensions associated with the West Asian crisis and the Russia-Ukraine war, according to the analyst who believes that any rally will be met with increased selling at higher levels.
“Investors should look beyond the Nifty to the broader market where there is hectic activity happening. Companies reporting good results and good forward guidance are being bought by investors- retail as well as institutions- even at high valuations. Since there are no significant floating stocks in most of these stocks in the broader market, the rally is sharp. Segments like CDMO, healthcare, precision engineering and power infrastructure are attracting investors. However, investors should not rush in to buy at any prices. Valuation is important,” he added.
Weekly Hammer candle has been formed in Nifty, which reinforces the strength of key support levels and keeps the reversal setup intact, said Anand James, Chief Market Strategist at Geojit Investments. He noted that the index remains poised to extend its recovery towards 24,317 - 24,380, followed by 24,400-24,545 in the near term.
“The bias remains positive as long as the 24,060-24,000-support zone is defended. However, Nifty VIX may gain some traction ahead of the F&O expiry tomorrow, leading to higher volatility,” he further said.
