Benchmark indices Sensex and Nifty gained little more than 1 per cent on Monday on the back of a strong rally in the US markets last Friday. The Sensex gained 1.06 per cent, or 709 points, to close at 61764. The Nifty index rose 1.08 per cent, or 195 points, to close at 18264.
Thirteen of the NSE’s 15 broad-based sectoral indices closed the day with gains. Global index provider MSCI’s decision to lower the free float in two Adani Group stocks weighed on the entire group, with five of the group’s listed companies closing with losses for the day.
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The global share market appeared strong ahead of US inflation data this week, which may be key for the Federal Reserve’s monetary policy outlook.
“While the undertone continued to remain bullish, the upbeat US market close last Friday further buoyed the local market sentiment. With hopes of the interest rate hike cycle reaching its peak and banking woes in the US receding, investors latched onto rate-sensitive stocks of banking, automobiles, and realty as strong monthly sales numbers are pointing towards a decent recovery. Technically, after a last Friday correction, benchmark Nifty took support near 18050 one more time and bounced back sharply. Post-reversal, the index successfully cleared the short-term resistance of 18200, which is broadly positive. On daily charts, the index has formed a bullish candle, and currently it is comfortably trading above the 18200 level, which would be the sacrosanct support level. Above the same, the index could move up till 18350–18400, while on the flip side, below 18200, the uptrend would be vulnerable,” said Shrikant Chouhan, Head of Equity Research (Retail), Kotak Securities.
“Nifty is building a strong base for an up move. Buying aggression is witnessed after crossing the resistance at around 18,200 levels. The overall trend is positive, as prices are trading above the breakout levels of inverted head and shoulder patterns. The support for the Nifty is placed at around 18,050–18,000 levels, and the resistance is capped at 18500 levels. In case the Nifty breaches below 18,000 levels, then 17,800 will be the next support zone,” said Rohan Patil, Technical Analyst, SAMCO Securities.