Sensex jumps 564 points, Nifty tops 23,400; will this upmove sustain?

Indian equity benchmarks ended higher on Monday as moderating crude oil prices and bond yields provided some relief to investors amid continued geopolitical concerns.

The 30-share BSE Sensex pack surged 564.03 points or 0.76 per cent to settle at 74,858.99, while the NSE Nifty50 index gained 67.90 points or 0.29 per cent to end at 23,414.30.

Among the major Nifty gainers, shares of Eternal Ltd, HCL Technologies Ltd, ITC Ltd, Sun Pharmaceutical Industries Ltd and Reliance Industries Ltd (RIL) advanced up to 2.77 per cent.

Ajit Mishra, SVP (Research) at Religare Broking, said markets jumped today as easing crude prices and bargain buying supported sentiment following the recent six-week correction.

"However, the recovery remained measured as elevated global yields, persistent geopolitical uncertainty and renewed US-Iran tensions continued to keep investors cautious. On the sectoral front, realty, pharma and FMCG were among the better-performing sectors, while metals and IT witnessed some profit-taking. The broader market remained relatively steady, with the mid-cap and small-cap indices ending almost unchanged, indicating a lack of strong participation beyond select pockets," he also said.

"Global cues turned somewhat supportive as Brent crude slipped below $101 per barrel, aided by expectations of a gradual recovery in Saudi oil shipments. The rupee remained relatively stable around the Rs 95.8–96/$ zone, while FII flows continued to warrant close attention amid the prevailing global uncertainties," Mishra further stated.

Ponmudi R, CEO of Enrich Money, stated, "While Indian equities ended on a firmer note, persistent geopolitical uncertainty and still-elevated energy prices continue to warrant a cautious approach. The durability of the recent recovery is likely to depend on sustained stability in crude oil prices and greater clarity on the geopolitical front."

Vinod Nair, Head of Research at Geojit Investments, said, "Improving sentiment ahead of the upcoming US-China talks, renewed hopes of diplomatic engagement between the US and Iran at the UN, and the decline in oil prices and bond yields have provided relief to investors. The easing of concerns around inflation and energy costs has supported a broad-based recovery across sectors and supported overall market sentiment. Furthermore, the earnings cycle appears to be turning positive, coupled with relatively attractive valuations in select pockets of the market, continues to support a constructive medium-term outlook for equities. However, in the near term, geopolitical developments and interest-rate expectations will remain key variables influencing investor behaviour and market direction."

Nifty outlook

Nagaraj Shetti, Senior Technical Research Analyst at HDFC Securities, said, "For Nifty, the next important cluster resistance to be watched is around 23,600. Any weakness from here could find support around 23,200 level this week."