The Sensex and Nifty saw gains today due to broad-based buying, with both indices continuing their winning streak for the second day. The positive momentum was driven by a cooling off in oil prices, indicating a potential easing of tensions in the Iran-Israel conflict. However, analysts are cautious about the near-term outlook, citing concerns over elevated US bond yields that could lead to foreign outflows from the Indian markets.
The Sensex rose by 0.77 percent to 73,648.62, while the Nifty50 gained 0.86 percent to 22,336.4. Market breadth was positive, with more than twice as many advancing shares compared to declining ones.
Gift Nifty Future traded today as 22,386.50 +183 (0.82%) with 92,957 contract volume as on 22-Apr-2024 15:40:11 and made high 22,397.50 and low 22,181.00 today.
V K Vijayakumar, Chief Investment Strategist at Geojit Financial Services, highlighted the impact of US bond yields, which are currently around 4.6 percent, on market sentiment. He suggested that further selling by foreign institutional investors (FIIs) could be triggered by these high yields.
In terms of technical levels, Sameet Chavan, Head of Research, Technical and Derivative at Angel One, identified 22,000 as a major support for the Nifty. He suggested that a breakthrough above 22,430-22,500 could strengthen the bullish momentum.
The broader markets also performed well, with the BSE Midcap and BSE Smallcap indices gaining up to one percent. The India VIX, which measures near-term volatility, decreased by 5 percent to 12.7, indicating a positive sentiment.
All sectors participated in the rally, with Nifty PSU Bank leading the gains with over 3 percent, followed by Nifty Auto, Nifty Pharma, and Nifty Infrastructure indices, each gaining around one percent.
Looking ahead, market experts anticipate continued stock-specific action as the corporate earnings season progresses. They advise investors to focus on accumulating quality stocks until geopolitical tensions in West Asia ease and India Inc’s earnings season concludes.
On the global front, investors will be closely watching the Federal Reserve’s preferred inflation data metric, the Personal Consumption Expenditure, scheduled for release on April 26. This data will provide insights into the future trajectory of interest rates, particularly after the US Fed expressed caution over inflation exceeding 2 percent.
Additionally, quarterly results from big tech firms like Meta, Alphabet, Microsoft, and Tesla will be closely monitored this week, potentially impacting both the tech-heavy NASDAQ Composite and the S&P 500 indices.
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