Sensex, Nifty climb in early trade: What's driving the continued upmove?

Indian equity benchmarks opened higher on Monday, extending gains for the fourth consecutive session, supported by easing crude oil prices, improving domestic macro indicators and renewed foreign institutional investor (FII) buying.

The 30-share BSE Sensex pack rose 260.34 points or 0.33 per cent to trade at 77,763.91 during the initial trading session, while the NSE Nifty50 pack advanced 77.20 points or 0.32 per cent to 24,347.90.

The broader markets were also trading on a positive note. Nifty Midcap100 climbed 0.17 per cent, while Nifty Smallcap100 edged up 0.06 per cent.

Among the major contributors to the Sensex's gains were HDFC Bank Ltd, ICICI Bank Ltd, Axis Bank Ltd, Bharat Electronics Ltd (BEL), Bharti Airtel Ltd, State Bank of India (SBI), Mahindra & Mahindra Ltd (M&M), Titan Company Ltd and Tata Steel Ltd.

Rajesh Palviya, Head of Research at Axis Direct, noted, "For India, the macro backdrop continues to improve. Brent crude has eased towards the $72 per barrel mark amid expectations of higher OPEC+ supply and normalisation of geopolitical risks, which should support India's inflation and external balance."

VK Vijayakumar, Chief Investment Strategist at Geojit Investments, said, "Revival of monsoon and FIIs turning buyers last Friday are positives for the market in the near-term. From this week onwards the market will start responding to the Q1 results which will begin on July 9. Overall, Q1 results will be subdued due to the energy shock and macro headwinds triggered by the conflict in West Asia. Now that the macro headwinds are behind us, the market will be looking forward to the potential trends in the rest of the year by taking cues from Q1 results."

He added, "In Q1, financials and autos are likely to outperform while IT will report subdued results and modest guidance. Financials will report better-than-expected results driven by impressive credit growth of 17 per cent. NBFCs in gold loan and consumer financing will report revenue and profit growth around 20 per cent. In automobiles, commercial vehicles and two-wheelers will report impressive numbers since the Q1 sales in these segments have been better-than-expected."

He suggested 'buying-on-dips' would be a good strategy in the near term.

Nifty outlook

Anand James, Chief Market Strategist at Geojit Investments, stated, "Despite the consecutive weeks of gains, Nifty has only reached the April's highest closing figure from where a multi-month downtrend had begun. We will continue to see 23,800 a strong downside marker while we chase short term upsides with an eye on 24,170. Expect whip saw moves to 24,600, which may not be sustainable initially. However, a close above 24,400 could render the trend stable for a 24,800-25,250 move."c