Benchmark indices Sensex and Nifty climbed nearly 1 per cent in Monday’s trade, in line with Asian peers, led by buying in banking and financial names, as investors felt the recent five-day fall was unwarranted. US stocks climbed over 1 per cent on Friday, S&P500 futures advanced and markets across South Korea, Japan and China moved in tandem. India was no exception.
Sensex climbed 624.70 points or 0.80 per cent to 78,666.29. Nifty stood at 23,740.60, up 153.10 points or 0.65 per cent. The BSE market capitalisation rose Rs 87,765 crore to Rs 4,41,86,982 crore. HDFC Bank Ltd led Sensex’s top gainers, rising 1.68 per cent to Rs 1,801.80. Bajaj Finance advanced 1.28 per cent to Rs 6,924.15. ICICI Bank Ltd, Tata Steel Ltd, Bharti Airtel Ltd and Reliance Industries Ltd added over 1 per cent each.
Tata Steel Ltd, Tech Mahindra Ltd, ITC Ltd, IndusInd Bank Ltd, Axis Bank Ltd and State Bank of India (SBI) were other big gainers, rising up to 1 per cent. Sensex debutant Zomato fell 2 per cent to 275.95. Sun Pharma declined 0.48 per cent to Rs 1,797.95.
“In the short run, there will be market rebounds which may be followed by renewed FII selling. A sustained rally is possible only when we have indications of a growth revival in the economy. This is likely in early 2025,” said V K Vijayakumar, Chief Investment Strategist, Geojit Financial Services.
Vijayakumar said the FPI buying witnessed in early December completely reversed last week with FPI selling of Rs 15,826 crores. The outperformance of the US stock indices and the relative underperformance of India are driving this change in FPI strategy, he said.
“The strength of the US economy, robust US corporate earnings, expectation of corporate tax cut by President Trump soon after assuming office and the steady appreciation in US dollar are factors favourable to the US market. Slowdown in Q2 GDP growth and stagnation in corporate earnings in India have soured the domestic market sentiments,” he said.
ICICI Securities said Nifty had fallen over 1,200 points in the past five session and hauled daily stochastic oscillator in oversold territory, which indicated a possibility of minor pullback.
For a meaningful pullback to materialise, the index need to decisively close above the previous session’s high of 240,65, it said.
“A failure to do so would lead to extended correction wherein next support is placed at 23,200 as it is November low of 23,260 coincided with 61.8 per cent retracement of Jun-Sept rally (21,281-26,277). Only, a sustenance below 23,200 would lead to extended correction towards key support threshold of 22,900. Meanwhile, on the upside, 24,400 would act as immediate resistance being coincided with 50 days EMA placed at 24385,” it said.
Akshay Chinchalkar, Head of Research at Axis Securities said Nifty support lies at 23,400, which is the objective of the short-term Head and Shoulders top that was confirmed on December 18.
“Under that, final support for bulls lies at the November 21 low of 23,263. The three-day momentum is under five and, therefore, deeply extended on the downside, so the likelihood of a rebound remains very high,” he noted earlier today.
Shares of India Cements Ltd jumped 11 per cent while those of UltraTech Cement advanced 1 per cent in Monday’s trade after the latter received Competition Commission of India (CCI) nod for acquiring a majority stake in the former.
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