Indian stock market indices Nifty 50 and Sensex are likely to open higher

Indian stock market

Indian stock market indices Nifty 50 and Sensex are likely to open higher on Tuesday, following positive cues from global markets. The Gift Nifty, which indicates the direction of the Indian benchmark index, was trading above 22,000 level, higher than the Nifty futures’ previous close of 22,015.

Nifty formed a small body type candle at the highs with minor upper and long lower shadow.

Nifty 50 closed at 21,981 on Monday, after forming a small candle with a long lower shadow on the daily chart. This suggests that the bulls managed to defend the support of 21,800 – 21,900 levels, despite the initial selling pressure. The index needs to sustain above 22,000 – 22,100 levels to resume the uptrend towards 22,500 – 22,600 levels, according to technical analysts.

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Sensex also ended in the green on Monday, at 74,098, after recovering from the intraday low of 73,369. The index has been moving in a narrow range of 73,000 – 75,000 for the last few sessions, indicating a consolidation phase. A decisive breakout above 75,000 level could trigger a fresh rally towards 76,000 – 77,000 levels, analysts said.

 

The market sentiment was boosted by the positive global cues, as the US and European markets rallied on Monday, amid hopes of a swift economic recovery from the covid-19 pandemic. The US President Joe Biden’s $1.9 trillion stimulus package, which is expected to be passed by the Congress soon, also lifted the investor confidence.

The Dow Jones Industrial Average rose 0.76%, the S&P 500 gained 0.74%, and the Nasdaq Composite added 0.95%.

The Asian markets also followed the upbeat trend, as the MSCI’s broadest index of Asia-Pacific shares outside Japan rose 0.4%. Japan’s Nikkei 225 climbed 1.3%, China’s Shanghai Composite advanced 0.7%, and Hong Kong’s Hang Seng index gained 0.8%.

The Indian market participants will also keep an eye on the macroeconomic data, such as the wholesale price index (WPI) inflation and the trade balance, which are due to be released later in the day. The WPI inflation is expected to rise to 4.5% in January, from 1.2% in December, due to the increase in fuel and food prices. The trade deficit is likely to widen to $15.5 billion in January, from $15.2 billion in December, as the imports may have outpaced the exports.

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The market breadth, which indicates the overall health of the market, was positive on Monday, as 1,714 stocks advanced, while 1,254 stocks declined on the NSE. The volatility index, India VIX, which measures the expected volatility in the market, fell 3.6% to 21.67, indicating a decline in fear among the investors.

The sectoral indices were mixed on Monday, as the Nifty PSU Bank index surged 4.7%, the Nifty Metal index jumped 3.4%, and the Nifty Realty index rose 2.9%. However, the Nifty IT index slipped 1.1%, the Nifty FMCG index dropped 0.8%, and the Nifty Pharma index fell 0.7%.

The top gainers on the Nifty 50 were Tata Steel, Hindalco, ONGC, SBI, and Coal India, while the top losers were HCL Tech, Britannia, Dr Reddy’s, Infosys, and TCS.

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The foreign institutional investors (FIIs) were net buyers in the Indian equity market on Monday, as they bought shares worth ₹1,329 crore, while the domestic institutional investors (DIIs) were net sellers, as they sold shares worth ₹1,688 crore.

Source : mint

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