NEW DELHI: India’s equity market may scale to a new all-time high this week if supported by favourable global cues and persistent foreign institutional investors (FII) buying for a session or two. The BSE Sensex on Friday had jumped 467 points to close at 63,385; while the broader NSE Nifty index moved 138 points to settle at 18,826.
During Friday’s intraday session, Sensex touched a high of 63,520, just 63 points away from its all-time high of 63,583. Nifty is also trading near its all-time high of 18,888. Both the Sensex and Nifty gained over 1% last week. The broader index - small and mid-cap - performed exceptionally well, with a rise of nearly 3% for the week.
“Technically, the Nifty continues to exhibit a bullish trend, with the all-time high of 18,888 serving as immediate resistance. If the index surpasses this level, a rally towards the 19000/19150 level can be anticipated in the near term. On the downside, the immediate support level is at 18660, and further support can be expected at 18530. These levels will be important in determining potential price movements,” said Pravesh Gour, Senior Technical Analyst, Swastika Investmart.
According to Gour, the Indian market will be closely monitoring the progress of the monsoon season. The country’s weather office has maintained its forecast for a normal monsoon this year; however, it has already been delayed by around 10–13 days this year. Globally, an increase in volatility is expected in the US market over the coming week. This is due to the upcoming semi-annual testimony of FED Chairman Jerome Powell to the US Congress, added Gour.
V K Vijayakumar, Chief Investment Strategist at Geojit Financial Services said that an area of concern is that due to the El Niño phenomenon, monsoon has been deficient, so far, in 29 out of the 36 IMD divisions. This can improve in the coming weeks, as has happened in the past. If not, some institutional selling is likely, added Vijayakumar.
The Indian equity market has seen a sharp rally in the past three months wherein the Sensex has gained over 5,500 points. This rally is supported by favourable macroeconomic numbers such as the easing of consumer inflation, growth in industrial productivity and robust GDP numbers. Foreign buying too has increased in domestic equities with R16,405 crore FPI inflows till 17 June. This is on top of the massive R 43,838 crore invested by FPIs in May.