Sensex, Nifty snap two sessions of losing streak but analysts don't sound very bullish; here's why

Benchmark indices snapped two sessions of losses on Monday, powered by a rally in the Reliance Industries stock and gains in the Asian markets. Sensex rose 1,005 pts to 80,218 and Nifty gained 289 points to 24,328.  Market cap of BSE-listed firms rose 4.52 lakh crore to Rs 426.10 lakh crore mark today from investor wealth of previous session at Rs 421.58 lakh crore.

Reliance Industries, Sun Pharma, Tata Steel, SBI, Axis Bank, M&M and Tata Motors were the top Sensex gainers, rising up to 5.27%.

RIL shares ended 5.27% higher at Rs 1368.50 on BSE after conglomerate announced its Q4 and fiscal earnings. 

As many as 75 stocks hit their 52-week highs today. On the other hand, 50 shares touched their 52-week lows on BSE. 

However, market breadth was negative. Of 4179 stocks traded, 1958 stocks ended in the green. Around 2038 stocks in the red while 183 stocks remained unchanged.

BSE smallcap index rallied 188 pts or 0.39% to 49,193 and BSE midcap index zoomed 568 pts or 1.34% to  43,097 on Monday.

Ajit Mishra – SVP, Research, Religare Broking is of the view that participants should maintain a positive yet cautious bias in the near term. 

“Markets started the week on a strong note, gaining over a percent, driven by favorable cues. The absence of any major geopolitical developments between India and Pakistan over the weekend, along with stability in global markets, eased pressure and triggered an upbeat start. Additionally, strength in index heavyweight Reliance, following its results, further supported the move as the session progressed. As a result, the Nifty index closed near the day’s high at 24,328.50, up by 1.20%.

On the sectoral front, all key sectors, barring IT, participated in the rally, with pharma, energy, and auto emerging as the top gainers. The broader indices also performed well, posting gains in the range of 0.89% to 1.60%. This buoyancy is certainly encouraging; however, participants should maintain a positive yet cautious bias, given the lingering geopolitical tensions. A decisive breakout above 24,400 could trigger fresh momentum in the Nifty, potentially propelling it towards the 24,800 marks. Amidst all this, the focus should remain on sectors and themes showing consistent outperformance, with an aim to accumulate quality counters on any intermediate dips,” said Mishra.

Shrikant Chouhan, Head Equity Research, Kotak Securities said, “Technically, after a promising opening, the market maintained positive momentum throughout the day. Additionally, it formed a long bullish candle on the daily charts, which supports a further uptrend from current levels. We believe that the short-term market texture is still on the bullish side but buying on intraday dips and selling on rallies would be the ideal strategy for day traders. On the downside, 24200/79800 and 24100/79500 would act as key support zones, while 24400-24500/80500-80700 could serve as crucial resistance areas for the bulls. However, if the market falls below 24100/79500, the uptrend would become vulnerable.”

Nandish Shah, Senior Derivative & Technical Research Analyst, HDFC Securities expects the market to rise in the near term. 

“Nifty is in continuation of an uptrend, as it did not even break below its 8 days EMA during running correction.  Next resistance for index is seen at 24545, which happens to be 61.8% retracement of the entire fall seen from 26277 to 21743. On the downside 24150 could offer immediate support for Nifty,” said Shah
 
Rupak De, Senior Technical Analyst at LKP Securities said, “The Nifty recovered smartly, shrugging off the negativity of last week. However, the upside was limited to the recent high, keeping the consolidation phase intact. On the higher end, 24,360 has remained a resistance level, and the Nifty might spend some more time around the current range unless 24,360 is decisively breached. Above 24,360, the index could move towards 24,550, where the 61.80% Fibonacci retracement level of the previous fall from 26,277 to 21,743 lies. On the lower end, support is placed at 24,000, below which the index might start falling towards 23,800 or even 23,350.”

FII-DII data

Foreign institutional investors bought Rs 2,952.33 crore worth of equities on a net basis on Friday, while domestic investors bought Rs 3,539.85 crore of shares, as per provisional NSE data.

Previous session 

Sensex was down 588.90 points or 0.74 percent at 79,212.53, and Nifty slipped 207.35 points or 0.86 percent to close at 24,039.35 on April 25.