Dalal Street extended gains for the third straight week on upbeat global cues and rotational buying across sectors. The Indian equity market closed higher, with IT (information technology) stocks leading the gains. Both the Nifty and Sensex reached record-high levels, with the Sensex rising by 502 points to 66,060 and the Nifty gaining 150 points to 19,564. The Nifty IT index recorded its biggest single-day gain since September 2020, surging more than 4 percent.
"A decisive close above 31,600 in the Nifty IT index and sustainability above 44,500 in the Nifty Bank would further fuel the momentum. Needless to say, the positive tone of the US market is also helping in keeping the upward bias and a breakout above 34,600 in the Dow Jones Industrial Average (DJIA) will further boost the sentiment," said Ajit Mishra, SVP - Technical Research at Religare Broking.
Going ahead, market participants will closely monitor global and domestic cues, upcoming quarterly earnings season, FII and DII activities, progress of monsoon, crude oil prices, among others.
"These indicators can provide valuable insights into the state of the global economy and may impact market sentiment. Additionally, Institutional activity will also have a significant impact on market trends," said Pravesh Gour, Senior Technical Analyst at Swastika Investmart.
Investors will also track the movement of rupee against the US dollar and crude oil prices.
Gour said, "The direction of global stock markets, fluctuations in the rupee-to-dollar exchange rate, and movements in crude oil prices will all play a crucial role in influencing the overall market trend. It is important to consider these factors alongside domestic developments."
In the second week of earnings season, HDFC Bank, Indusind Bank, L&T Technology Services, Hindustan Unilever, Infosys, DLF, Reliance, among others will release their first quarter results.
Moreover, the monsoon session of Parliament is set to commence on July 20 and will extend till August 11. This session will be significant as several bills, including the Personal Data Protection Bill and the Forest Bill, are listed on the agenda for discussion and potential implementation.
Tech View
Technically, The Nifty index recently broke out of an 8-day consolidation period and closed at its highest level of 19564. It has also witnessed a breakout of flag formation, where 10-DMA (daily moving average) is acting as an immediate support level. "19650 and 19770 resistance resistance levels while 19900-20000 will be the next target zone. On the downside, 19300 is strong support, and the buy-on-dip approach will be continued at every dip," Gour said.
BankNifty is underperforming, but it is near critical support of 44500. "We can expect a bounce-back from here, where 45200 will be an immediate hurdle. Above 45200, a short-covering move is expected towards 45500/45700 levels. In terms of derivative data, FIIs' long exposure in index futures currently stands at 70 percent and the put-call ratio is at 1.34, indicating a positive stance," the analyst said.
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