NEW DELHI: Despite weak global cues, the Indian equity market snapped its four-day losing streak on Monday. The two benchmark indices- Sensex and Nifty50 - added 0.91% each to close the Monday trading session at 59,299.2 and 17,691.30, respectively.
This surge comes after Sensex and Nifty lost more than 2% points each last week owing to worrying global signs such as China’s energy crisis and the economy slowing down, rise in US bond yields and increase in crude prices.
The positive momentum seen on Monday, according to experts, is driven by the expectation of better Q2 earnings, recovery in economic activity and in anticipation of a better outlook from festival demand.
“Domestic cues remain positive as economic activities gain further momentum but elevated valuations along with multiple global concerns would keep the market volatile,” said Siddhartha Khemka, Head-Retail Research at Motilal Oswal Financial Services.
He added that the RBI’s monetary policy and Tata Consultancy Services’ quarterly results are the two key events that will be widely tracked.
The RBI is expected to maintain its policy rates but may lay the roadmap for tapering of stimulus in line with other central banks.
TCS would mark the start of the earnings season, which is expected to continue the strong earnings momentum, said Khemka.
Divis Labs, Hindalco Industries, NTPC, Bajaj Finserv and Tata Motors were the major gainers on the Nifty on Monday while Cipla, Grasim Industries, UPL, Eicher Motors and IOC were the biggest losers.
Meanwhile, brokerage firm Centrum recommended Titan and Kalyan Jewellers with a ‘buy’ rating and a target price of Rs 2,445 and Rs 95, respectively.
It said that aspirational demand is driving structural changes in the Indian jewelry sector which is favouring organised players.
Positive momentum
The positive momentum is driven by the expectation of better Q2 earnings, recovery in economic activity and in anticipation of better festival demand.