Sensex and Nifty ended higher on Monday, extending last week's gains amid mixed global equities. Sensex ended 141 points higher at 38,182 and Nifty gained 60 points to 11,274. On Friday, Sensex ended 15 points higher at 38,040 and Nifty gained 13 points to 11,214. During last week, Sensex has risen 433 points or 1.15%, while Nifty has gained 140 points or 1.27%
Sectorally, all indices ended with gains with Nifty Pharma climbing over 5%. Realty and CPSE index on NSE ended almost 2% each. M&M, followed by L&T, Kotak Bank, SBI, Bajaj Finance, Sun Pharma, ITC and HDFC duo were the top Sensex gainers. On the other hand, Maruti, Tata Steel and Nestle India were the laggards.
Overseas, Asian stocks ended lower on Monday as investors kept eye on flaring tensions between the United States and China with President Donald Trump's move to ban WeChat and TikTok. Investors were also cautious on US fiscal stimulus after talks between the White House and Democrat lawmakers broke down. Japanese and Singaporean markets were closed for public holidays.
On Wall Street, the S&P 500 retreated from a near six-month high on Friday amid a sharp slowdown in US employment growth data. Traders will also keep a track of global markets as the United States is likely to announce another round of stimulus this week. The relief package, which is being discussed between lawmakers, is likely to boost market sentiments domestically and globally.
Vinod Nair, Head of Research at Geojit Financial Services said,"Sectoral news flow boosted positivity in the Indian markets with Pharma index leading the gains. The gains were news-driven, with earnings results and government actions accounting for sectoral gains. Earnings results of select pharma companies drove gains in the sector while government actions to boost domestic defence productions helped gains in defence stocks."
Shares of defence companies were rallying in Monday's opening trade after Ministry of Defence announced over the weekend banning of 101 defence weapons and military platform items.
Shares of M&M, Dr Reddy, Pfizer, Divi Labs were trading as top gainers on Nifty after posting their Q1 results. Meanwhile, April-June quarterly earnings announcements by Titan, Power Grid, IPCA Labs, Bank of Baroda, AstraZeneca Pharma, TTK Prestige will also set the tone for the stock market.
Expressing views on the week ahead, Vinod Nair added, "Global markets are awaiting and will definitely be impacted by the heightened US-China tensions and imminent Chinese reaction. Heightened Chinese aggression could have a negative impact on our markets in the near term. However, there could be a silver lining for Indian markets in the long term, with global investors hesitating to invest in Chinese companies. For lack of options, some of this money could find its way into Indian companies, provided the right ecosystem is built. Earnings specific action will likely continue next week, with indices searching for direction in the near term. Accumulation continues the best strategy."
On the near term outlook, Ajit Mishra, VP - Research, Religare Broking said," Markets would react to the SC hearing on AGR dues and stocks especially from telecom and banking packs will remain in limelight. And since we're closely following the global markets, US-China trade tension, currency and crude oil movement would also be actively tracked. We maintain our positive yet cautious stance and suggest traders prefer hedged bets as volatility is here to stay. A decisive breakout above 11,350 in Nifty would again turn the bias in the favour of bulls."
On Nifty's near term technical levels, Sameet Chavan- Chief Analyst-Technical and Derivatives, Angel Broking said, "Since the last couple of days, we have been advocating some caution, because Nifty has approached a strong resistance zone of 11300-11350 and although there is no sign of weakness yet, it will not be easy for the index to overcome this sturdy wall. Going ahead, if we sneak and sustain below 11238, this will result in some immediate decline towards 11175-11120-11064 levels."
Worldwide, there are 200 lakh confirmed cases and 7.33 lakh deaths from the coronavirus COVID-19 outbreak. In India, the number of infected cases has risen to 22 lakh, including 0.44 lakh fatalities.