Foreign institutional investors bought shares worth more than ₹2500 crore in the past three sessions
L&T surged about 7% while Bajaj Finance jumped 9% today
Indian shares extended gains today to the fourth day when they closed about 1.5% higher. Financial stocks rallied with Nifty banking index gaining 2.8%. The NSE Nifty 50 index ended up 1.55% at 10,471 on Tuesday, and the benchmark S&P BSE Sensex gained over 500 points to 35,464. Larsen & Toubro Ltd closed 6.7% higher and provided the top boost to the Nifty 50 index, while Bajaj Finance Ltd, which surged 9.3%, was the top gainer on the index.
Aided by positive cues from global markets and sustained foreign fund inflow, investor sentiment remained upbeat.
Markets welcomed news reports that said that top military commanders of Indian and Chinese armies have reached a “mutual consensus to disengage" from “all friction areas" along the Line of Actual Control (LAC).
Foreign institutional investors bought shares worth more than ₹2,500 crore in the past three sessions. The information technology index ended 1.5% higher after falling as much as 1% earlier in the session on worries over U.S. President Donald Trump's plan to block the entry of foreign workers on H-1B visas.
Here is what analysts said on today's market rally:
Ruchit Jain, Senior Analyst - Technical and Derivatives, Angel Broking
"The index has been forming a ‘Higher Top Higher Bottom’ structure and the broader markets have done considerably well in last few sessions. The upmove in index supported by a broader market participation is certainly an encouraging sign and hence, we have been optimistic on the market and have been advising to use dips as buying opportunity. Last dew day’s have been traders delight as the midcap and small cap names (along with the banking and NBFC space) have provided good trading opportunities.
As of now, there are no signs on reversal and hence, one should keep focusing on stock picking from a momentum perspective. Just one caveat that we would like to highlight is the formation of a ‘Wolfe Wave’ structure on daily chart of Nifty and resistance according to the pattern is seen around 10550-10600. We would see how the index behaves around this juncture in next couple of sessions. Until any reversal signs seen, traders are advised to take a stock specific approach and trade with a positive bias. The intraday supports for Nifty are placed around 10390 and 10300 whereas resistance is seen in the range of 10550-10600."
Vinod Nair, Head of Research at Geojit Financial Services
"The Indian indices traded positive, in sync with global indices, seemingly on the back of continued liquidity flows into the markets. The gains were spread across sectors and market caps, with even the IT index overcoming its losses, due to the proposed change in H-1B visa rules. Markets were also optimistic on the back of news of a de-escalation in border hostilities and the pace of Covid-19 recoveries increasing, in spite of the new virus infections. Investors advised to remain cautious and keep booking profits."
Manish Hathiramani, Index Trader and Technical Analyst, Deen Dayal Investments
"We did not break the support of 10200 and gallantly marched closer to the 10500 marks before the close of markets. We should now target 10700 as the next target for the Nifty Index."
Ajit Mishra, VP - Research, Religare Broking Ltd.
"Markets extended gains for the fourth consecutive session, thanks to upbeat local cues and supportive global markets. The first half was slightly dull but the news of easing of tension between India and China helped markets to gain momentum in the latter half. We suggest preferring banking, financials, FMCG and select infra stocks for long trades.
"The FII net inflow in the indian equity benchmark has strengthened the benchmark in the last few sessions. Going ahead investors will keep a close eye on the developments of economic activity, the situation of Covid-19 and its vaccine, crude oil prices, Geopolitical issues like India-China border and US-China. At present level, downside support comes at 10300 while upside resistance comes at 10600 level."
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