Sensex extends gains to second week. Why some market experts are cautious2 min read . Updated: 26 Jun 2020, 04:41 PM IST
- IT stocks led the gains today with Infosys surging 7% and TCS 5%
- ITC was the top loser in the Sensex pack
Indian stock markets posted strong gains today led by gains in Infosys, HDFC Bank, TCS and Reliance Industries amid positive cues from global markets. The Sensex settled 329 points higher at 35,171 while the NSE Nifty surged 0.90% to 10,383. Among the Sensex stocks, Infosys surged 7% to be top gainer. Both the indexes rose more than 1% this week and recorded a second straight week of gains.
Among other heavyweights TCS surged 5% while RIL rose 1.5%. Sentiment was boosted after IT consulting firm Accenture Plc beat analysts' estimates for third-quarter revenue and profit on Thursday and forecast strong bookings for the current quarter.
ITC fell about 3.5% to be the top loser after posting strong gains in the previous two sessions.
Investors are keeping a close watch on tensions between India and China due to the border dispute, say analysts.
Jimeet Modi, founder and CEO of SAMCO Securities & StockNote, says through the trend is up, the upside potential remains limited.
"Nifty 50 after rallying almost 38 percent from the lows has formed a spinning top candlestick pattern indicating a moment of indecisiveness. The index seems to be facing a major hurdle at 10550 as this level coincides with a 61.8% Fibonacci retracement of the fall from top to the recent bottom. Though the trend is up now, we expect the upside going ahead to remain limited and test the lower end of the channel drawn from the bottom, which comes at 9700 level."
Here is what analysts said on today's market action:
Sanjeev Zarbade, VP PCG Research, Kotak Securities
“Global markets were in a consolidation mode after previous weeks of strong rally. Fresh spikes in Covid-19 cases and reports of further rift between the US and China on trade front, restricted further gains. The Sensex, however, continued to remain firm and gained 440 points for the week. Market mood remained buoyant on expectations of earlier-than-anticipated normalization of activities, as most states committed to remain open despite continuous increase in daily Covid cases. Markets are seen entering a consolidation phase in the coming weeks with no major trigger. Geopolitical concerns and possibility of second wave of Covid-19 remain the near term risks which could impact investor sentiments. We advise investors to buy on declines from these levels."
Vinod Nair, Head of Research at Geojit Financial Services.
"Amidst stable global cues, Indian benchmark indices also ended with a positive bias. The FMCG index which was the top gainer yesterday, was the worst performer in today's trade. Nifty remains in a range and seems to be awaiting further cues for a breakout on either side. The close today means the uptrend remains, but upsides seem to be capped."
S Ranganathan, Head of Research at LKP Securities.
"Bulls maintained their control today as IT heavyweights rose amidst positive commentary from leading companies. Oil marketing companies too witnessed buying interest as the market managed to close the day on the upside. Also with a 20% excess rainfall rural themes attracted investor interest in the broader market".
Manish Hathiramani, Index Trader and Technical Analyst, Deen Dayal Investments
"We need to cross today's intraday high of 10410 for some momentum to build on the upside. If we are unable to do that, we might see rangebound movements next week. While the overall trend continues to remain positive, the support for this market is at 10200 and if we cross 10410 on a closing basis, we should go up to 10650-10700."
Vishal Wagh, Research Head, Bonanza Portfolio
"Going forward, major support will be seen around 10195 and Resistance will be 10550."