Indices start new fiscal on winning note, hit fresh highs

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Indian equities started the new financial year on a strong note, hitting fresh highs, amid positive global cues.

The Sensex ended with a gain of 363 points, or 0.49 per cent, at 74,014. The Nifty rose to 22,462, up 0.6 per cent.

The broader markets outperformed with Nifty Midcap100 and Nifty Smallcap100 rallying 1.7 per cent and 3.3 per cent, respectively. Except auto and FMCG, all the sectors ended with gains, with realty, media and metals surging over 4 per cent each.

Metal stocks surged after economic data from China indicated that the manufacturing sector is seeing a rebound, which may lead to a rise in demand for metals. India’s housing demand witnessed robust growth in the first quarter of this year with unsold inventory falling to 7 per cent, leading to a rally in realty stocks. Auto stocks saw subdued interest post mixed set of monthly sales numbers.

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JSW Steel was the top Nifty stock with gains of over 5 per cent, followed by Tata Steel (4.7 per cent), Divis Labs (3.6 per cent) and Shriram Finance (3.1 per cent). Eicher Motors and Titan Company were the top losers, down 1.8 per cent and 1.7 per cent, respectively.

FPIs sold shares worth ₹522 crore on Monday, while DIIs bought shares worth ₹1,208 crore.

“Global sentiments got a boost led by lower than expected US PCE data and robust US GDP numbers which strengthened the hopes of rate cut. The market is expected to continue its positive momentum but the journey could be volatile on the back of elections and Q4 earnings this month,” said Siddhartha Khemka, Head-Retail Research, Motilal Oswal Financial Services.

All eyes on Fed, RBI

Going ahead, the RBI monetary policy, India PMI data, and US non-farm payroll data will set the direction of the market. While the policy, due this Friday, is expected to maintain a status quo, the central bank’s commentary would be keenly watched.

Vinod Nair, Head of Research, Geojit Financial Services, said the momentum may continue in the near term, supported by a global rally in expectation of a Fed rate cut in June and a healthy domestic earnings growth forecast in Q4FY24.

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Global equities were mostly higher Monday as US inflation figures did little to modify views that the US Federal Reserve will cut interest rates this year. Shanghai Composite was the top gainer among Asian indices with gains of 1.2 per cent. European indices were trading marginally in the green.

“Though Nifty is now placed at the crucial hurdle of around 22,500 levels, the overall chart pattern remains positive and we are unlikely to see any sharp decline from here. The market is now in an attempt of breaking above the crucial overhead resistance of 22,500-22,550 levels. Any consolidation or dip could be a buying opportunity,” said Nagaraj Shetti, Senior Technical Research Analyst, HDFC Securities.