Consolidation with a bullish bias seen in market

The Sensex rose to a record high intra-day to 40,483.21 points, as better-than-expected company earnings continued to attract investors. Gaining for the seventh straight session in its longest winning run since March 20, the Sensex finally settled at a fresh closing peak of 40,302 on Monday, up 136.93 points, or 0.34 per cent. The broader Nifty-50 advanced 50.70 points, or 0.43 per cent, to close at 11,941.30.

Eighteen out of 28 Nifty companies that have reported quarterly earnings have beaten or matched the average analyst estimate.

Experts said better liquidity from foreign funds, de-escalation in geopolitical risks and focus on upcoming reforms to revive growth also boosted investor sentiment.

“Indian equities have seen a good rally recently, powered by improved global equity flows” amid better than expected results, Citigroup Inc strategists led by Surendra Goyal wrote in a note on Sunday. “We see limited upside given valuations post the rally and the continued uncertainty over growth outlook,” the note added.

“India is probably one of the few economies where growth will re-accelerate next calendar year, it stands very well among its peers,” said David Gaud, Chief Investment Officer for Asia at Pictet Wealth Management in Singapore.

Technical View

Chandan Taparia, Vice President, Analyst-Derivatives at Motilal Oswal Financial Services Ltd, said: “The Nifty failed to surpass psychological 12,000-mark and witnessed some consolidation with a bullish bias. It has been forming higher highs–higher lows on the weekly scale and supports are gradually shifting higher. Now, it has to continue to hold above 11,880 levels to witness an up-move towards 12,000 and then 12,103 zones while on the downside, major support is seen at 11,780 zones.”

Market View

Sunil Sharma, Chief Investment Officer, Sanctum Wealth Management, said: “Indian markets continued their upward rally as better than anticipated earnings attracted investors. Further, buoyant global markets have supported the Indian markets.  For instance, passenger car sales grew last month for the first time since February 2019. On the flows front, FIIs have been net buyers for a second straight month.”