After posting losses in the last four sessions, domestic equity indices surged on Tuesday tracking heavy buying in index majors Reliance Industries and HDFC Bank, and encouraging trend in global equities. While the BSE Sensex ended 748.31 points or 2.03 per cent higher at 37,687.91, NSE Nifty rose 203.65 points or 1.87 per cent to 11,095.25. HDFC Bank rose nearly 4 per cent after the RBI approved the appointment of Sashidhar Jagdishan as Managing Director and CEO of the bank.
Reliance Industries, HDFC Bank, Maruti, Axis Bank, HDFC, ICICI Bank and Bajaj Finance ended with gains. On the other hand, Tech Mahindra, IndusInd Bank, HCL Tech, UltraTech Cement and Infosys were among the laggards.
"We believe Indian markets would continue to take cues from global peers and the upcoming RBI policy would be the next major trigger. At the same time, as more companies would announce their Q1FY21 earnings, stock-specific action would continue to induce high volatility. We reiterate our advice to focus on stock selection and risk management," said Ajit Mishra, VP - Research, Religare Broking.
Here are 5 key things to know before Wednesday's opening bell:
Stock specific action
According to traders, stock-specific action in index-heavyweights drove the markets higher. Further, strong foreign fund inflows and positive cues from global markets cheered investors. Exchange data showed that foreign institutional investors purchased equities worth Rs 7,818.49 crore on a net basis on Monday.
Bourses in Shanghai, Hong Kong, Tokyo and Seoul ended with significant gains. Stock exchanges in Europe were also trading on a positive note in early deals.
RBI MPC meet
Banking stocks saw some buying interest after Monday's fall ahead of the RBI monetary policy on August 6. The meeting would decide on the policy stance amid the urgency to revive the coronavirus-hit economy and increased demand for one-time loan restructuring by industry chambers.
PMI services data
July Markit Services PMI data is scheduled to be released tomorrow. As July PMI manufacturing data showed contraction, traders would keenly wait for the services numbers.
India's coronavirus case tally surged to 18,55,746 on Tuesday. As per health ministry data, the death toll in the country has climbed to 38,938 with 803 people succumbing to the disease in a day on Tuesday.
What experts say
"Tuesday's sharp up move in the benchmark Nifty seems to have reversed short-term negative sentiment in the market. Now, the key lows of 10,900 is going to be a crucial support for the market for the near term. Further sustainable up move in the next 1-2 sessions is likely to bring bulls back into action and Nifty could race towards the recent swing high of 11,340 levels in the next 3-5 sessions. Any intra-week decline from the highs could find a base around 11,000 levels," said Nagaraj Shetti, Technical Research Analyst, HDFC Securities.
"Technically, Nifty has formed a Bullish candle and negated the formation of lower high - lower lows of the last three trading sessions. Now, if it managed to hold above 11,050 zones then buying interest could emerge towards 11,250 zones while on the downside support exists at 10,900-10,880 zones," said Siddhartha Khemka, Head - Retail Research, Motilal Oswal Financial Services.