Why Sensex, Nifty has been rising for last four sessions — explained

Stock market of India extended its rally for fourth straight session on Thursday as all three key benchmark indices — Sensex, Nifty and Bank Nifty opened higher and further consolidated its gains in early morning session. In last four sessions, BSE Sensex has risen from 61,054 to 62,168 levels, logging over 1100 points gain or near 1.80 per cent rise whereas NSE Nifty has risen to the tune of 320 points or 1.77 per cent in this time.

According to stock market experts, weakness in US dollar, lowering treasury yield and FIIs (foreign institutional investors) turning bullish on Indian equity market are one of the major reasons that has brought upside momentum in the Indian stock market. However, they said that banking and auto segment has peaked out and hence one needs to look at IT, defense and FMCG stocks for higher returns in short term. They said that Sensex is trading in 61,300 to 62,600 range whereas Nifty is in 18,150 to 18,600 range. They said that market is sideways to positive and hence ‘buy on dips’ would be the ideal strategy for intraday trading or for short term positional investing.

FIIs turn net buyers

Speaking on the reason for rise in Indian stock market today, Ravi Singhal, CEO at GCL Broking said, “Market has been rising due to FIIs continuous buying. In last ten sessions, FIIs have remained net buyers that speaks volume about their sentiment in regard to Indian stock market. After weakness in the US dollar and US Fed officials hinting at interest rate pause regime, treasury yield has gone down and US dollar has become weak. So, FIIs are expected to move towards emerging equity markets where Indian stocks are expected to give better opportunity for bottom fishing to such FIIs.”

Ravi Singhal of GCL Broking went on to add that FIIs are expected to move towards stocks that are available at discounted price. As banking stocks have peaked out, IT may emerge as one of the favourite segment of FIIs and DIIs as IT stocks are available at highly discounted price.

On outlook for key benchmark indices of Indian stock market, Ganesh Dongre, Senior Manager — Technical Research at Anand Rathi said, “Currently, market is looking sideways to positive as Sensex is in 61,300 to 62,600 range while Bank Nifty is facing resistance at 43,800 to 44,000 levels. On lower side, it is having support at 42,500.”

Anand Rathi expert went on to add that Nifty today has immediate support placed at 18,150 whereas it is facing hurdle at 18,600 levels. However, he also maintained that market is sideways to bullish and hence ‘buy on dips’ would be an ideal strategy for intraday trading and short term positional investing.

On sectors that may fuel Indian stock market in current sideways to positive trend, Ganesh Dongre said, “IT, defense and FMCG segments are expected to provide support in this buy on dips market. As most of the frontline banking stocks have peaked out, one needs to look at those segment stocks that are available at discounted price.”

Buy or sell stocks

On stocks to buy today, Ganesh Dongre of Anand Rathi said, “In defense segment, Bharat Forge, BEL and HAL looks promising while in IT segment, Infosys, TCS, HCL Technologies and other large-cap stocks are looking positive.”

In FMCG segment, Anand Rathi expert advised investors to look at Hindustan Unilever Ltd and ITC shares.

Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of Mint. We advise investors to check with certified experts before taking any investment decisions.

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