Sensex rises 500 pts from day's low, Nifty reclaims 22,800: Key factors behind market gain
Nifty needs to trade below 22,650 for any further bearishness to emerge in the market, said analysts
Benchmark indices Sensex and Nifty climbed from day's low to trade in mild green on October 27 due to various reasons, including value buying. At 12:43 pm, the Sensex was up 140.37 points or 0.19% at 73,747.12, and the Nifty was up 70.85 points or 0.31% at 22,824.05. About 2,742 shares advanced, 1,057 shares declined, and 158 shares were unchanged. Key factors behind market gain Value buying emerged from lower levels a day after the markets snapped four-day losing streak.
Sensex rose 500 points from day's low and Nifty reclaimed psychologically important 22,800-mark. "Brent crude remaining above $114 and the US 10-year bond yield hovering around 4.97% continue to be near-term headwinds for the market. FIIs will remain in a risk-off mode in this adverse macro setting. However, the improving fundamentals of the corporate sector as reflected in Q2 earnings and the robust domestic fund inflows will continue to support the market," said V K Vijayakumar, Chief Investment Strategist, Geojit Investments Limited.
For the Nifty 50, Tata Consumer Products, Bharat Electronics, and Bharti Airtel lent the most support, while Infosys, ICICI Bank, and Reliance Industries added downside pressure. Tata Consumer rose around 6% and was the top gainer in the index after it released its earnings for the September quarter post trading hours Monday. Tata Consumer Products reported a better-than-expected second-quarter profit on Monday, helped by strong growth in its packaged foods and beverages businesses, even as demand for tea remained subdued.
The maker of Tata Salt and Tetley tea posted a consolidated net profit of Rs 469 crore for the quarter ended September 30, compared with Rs 404 crore a year earlier. Analysts, on average, had expected a profit of Rs 466 crore, according to data compiled by LSEG. On the sectoral front, Nifty Pharma was the top gainer, up 1.6%, and it was closely followed by Nifty Healthcare, which rose 1.3%. Nifty IT was the top laggard here, down almost 2%.
Index major Infosys extended its losses from Monday as weak sentiment due to a weak set of earnings for the September quarter prevailed. Infosys was down almost 3%. In other news, the thematic index, Nifty India Defence, gained over 2% after the Defence Acquisition Council Monday approved various capital acquisition proposals of the defence forces at an estimated cost of about Rs 2.12 lakh crore. 2) Buying in auto shares
Buying in auto shares like Bajaj Auto, Maruti Suzuki India ahead of their Q2 results capped losses in markets. Nifty Auto index was trading 1% higher. Nifty needs to trade below 22,650 for any further bearishness to emerge in the market, said analysts. "Follow through strength above 20 days EMA placed at 22,820 will signal further pullback towards the key resistance area of 23,100-23,200 being the confluence of last week high and 50 days EMA.
Failure to move above 22,820 will signal extension of the last two sessions consolidation in the range of 22,370-22,820," said Pabitro Mukherjee, Deputy Vice President-Research, Bajaj Broking. "22,600/73,000 is now the first crucial support, followed by 22,500/72,800. As long as these support levels hold, the pullback rally could extend towards 22,800/73,800. A sustained breakout above this resistance could open the way towards 23,000/74,500.
Conversely, a fall below 22,600/73,000 would weaken the bullish setup and warrant caution on long positions," said Shrikant Chouhan, Head Equity Research, Kotak Neo. "As long as dips are contained above 22,630, we will remain interested in an upside play aiming for 23,000 or even 23,500, with volatility expectations once inside the 22,800-900 region. Alternatively, inability to float above 22,630 could expose 22,250-22,000, but a collapse is less expected," said Anand James, Chief Market Strategist, Geojit Investments Limited.
