Sensex tops 54000, Nifty above 16200 as bulls clutch D-Street; here’s what fueling the rally today

BSE Sensex and Nifty 50 rose nearly 2 per cent on Tuesday led by strong gains in index heavyweights ICICI Bank and Reliance Industries Ltd (RIL)

BSE Sensex, NSE Nifty 50, stock market
Benchmark indices gained on the back of a sharp global pullback rally, along with short-covering in major heavy weights. Image: Reuters

BSE Sensex and Nifty 50 rose nearly 2 per cent on Tuesday led by strong gains in index heavyweights ICICI Bank and Reliance Industries Ltd (RIL). BSE Sensex crossed the 54000 level, while NSE’s Nifty jumped to 16,182.50 levels. Other stocks too, such as ITC, Infosys, Tata Steel, and L&T contributed the most to the indices’ gain. On the S&P BSE Sensex, just three stocks — Mahindra & Mahindra (M&M), Power Grid Corporation of India, and HDFC Bank — were trading in the red. Analysts say that positive global cues, buying in index heavyweights, and rebound in beaten down metal stocks on the back of updates on reopening in China lifted key indices on Tuesday. The BSE market capitalisation climbed over to Rs 253.63 lakh crore, which was Rs 10.13 lakh crore higher than previous session’s Rs 243.49 lakh crore market value, data available on BSE showed.

What’s fueling the D-Street rally?

Asian, European stock markets gain

Asian stock markets were trading higher on Tuesday, led by gains in Hong Kong stocks, on optimism about an easing of China’s crackdowns on tech and COVID-19, Reuters reported. European shares too started on a positive note with the STOXX index of Europe’s 600 biggest stocks (STOXX600) up 0.62 per cent, DAX rose 1.4 per cent, and CAC added 1.5 per cent. 

Market watchers said that technical pullback is fueling the rally. “Nifty had added shorts over the past many sessions. After declining over 1300 points in 9 sessions, the index has also gotten oversold on the daily charts and was resting at a pattern support,” Milan Vaishnav, CMT, MSTA, Consulting Technical Analyst and founder, Gemstone Equity Research & Advisory Services, told FinancialExpress.com.

‘Nifty likely to hit 16350 soon’

Nifty is witnessing lower level buying after testing the crucial support of 15750 levels, said another analyst. Ravi Singh, VP & Head of Research, Share India Securities, said that most of the sectors have rebounded from the lower levels and inflows in mutual funds and retail buying have been witnessed. “Accumulation was also prominent which helped the bulls to get back strongly. With this momentum, Nifty may touch the levels of 16350 in coming days,” Singh told FinancialExpress.com.

Market was deeply oversold since the last 3-4 sessions but it was reluctant to give any bounce back, Sameet Chavan, Chief Analyst-Technical and Derivatives, Angel One, said. He added that beaten down metal stocks have rebounded sharply on the back of updates on reopening in China, which has certainly provided the much needed push to most of the oversold spaces. “After many days, today we are seeing some conviction in put writers who have now formed an immediate support around 16000 for Nifty 50 and 33800-33500 for Nifty Bank,” Chavan said.

Sharp global pullback rally, short-covering in major heavy weights push D-St higher

Ajit Mishra, VP — Research, Religare Broking, told FinancialExpress.com that markets were witnessing a rebound after seeing corrections for the last 5 successive weeks. The existence of support around the March month low i.e. around 16,650 zone combined with oversold positions is fuelling recovery. “The trigger came in from the global counterparts especially US markets, which are also seeing some respite after the sharp decline,” he added.

Benchmark indices gained on the back of a sharp global pullback rally, along with short-covering in major heavy weights. Advances outnumbered declines by almost 6 times, indicating a broad-based rally today. “But overall, markets are jittery on inflationary concerns and forecasted slowdown in global economy. Investors are hence advised to adopt a cautious approach in the coming weeks,” Aamer Deo Singh, Head Advisory, Angel One told FinancialExpress.com.

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