Indian Equities Rise, Asian Shares Follow Wall Street Gains
Dear Trader…
Markets started the week on a firm note and gained nearly a percent, in continuation of the recent rebound. After the gap-up start, Nifty oscillated in a narrow range for most of the day and finally settled around the day’s high at 19484 levels. All the key sectors contributed to the move wherein metal, energy and pharma gained over a percent each. The broader indices also traded in tandem and rose in the range of 0.9 per cent -1.3 per cent.
Markets are largely mirroring the rebound of the US markets and look set to test the hurdle at 19,505 in Nifty. Going ahead, sustainability of the positive tone on the global front combined with improved participation from the banking pack would be critical. Meanwhile, we maintain our view to stay focused on stock selection.
Meanwhile, Optimism continued as soft US payroll data and expectations of moderation in monetary tightening by the Fed supported the sentiment. Since most of the headwinds are global in nature, investor sentiment has shifted to domestic-oriented businesses, where festive demand is healthy. So far, the spread of earnings in Q2 has been decent and brings more attention to capital goods, financials, and auto stocks. We expect H2FY24 will also continue the momentum, however, the tailwinds on margins are likely to moderate due to the recent uptick in commodity prices.
Technically, the important key resistances placed in Nifty future are at 19505 levels, which could offer for the market on the higher side. Sustainability above this zone would signal opens the door for a directional up move with immediate resistances seen at 19570 – 19606 levels. Immediate support is placed at 19404 - 19373 levels.
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