Indian equities indexes are likely to retain their bullish stance after ending the last session at the top for the day helped by a significant bounce in information technology (IT) companies bolstered the confidence for the whole market. If global indicators stay strong, the Nifty 50 might attempt to break out over 24,250, say analysts.
Market Performance
Benchmark indexes extended advances for the second straight session on Thursday, backed by broad-based buying and fresh strength in IT equities. The Nifty 50 rose 0.71% to end at 24,175.70 and the Sensex gained 0.75% to end at 77,502.12. The Nifty closed up 169.85 points while the Sensex climbed 579.48 points, a strong rebound after a volatile spell.
The rise was mostly spearheaded by IT equities, which surged after a little uptick after gains in global technology markets. Reassure investors that artificial intelligence-driven disruption to conventional software businesses is not a risk, and that was a big part of the sector’s recovery from a four-day sell-off.
Technical View
From a technical standpoint, market watchers see optimistic signals on the daily chart. The market opened with a gap and continued its strong momentum, establishing a bullish candlestick pattern, said one observer. The immediate support for Nifty is indicated around 24,075 and if it sustains above this level, the market is expected to continue its upward trajectory.
“Above 24,075, Nifty may continue its positive momentum towards 24,250-24,375 levels. But a fall below 24,075 may weaken optimism and might see the market revisit support levels between 23,980 and 23,900.
Macroeconomic Support
Fundamentals remain supportive of a positive market outlook. Both the Reserve Bank of India and the Federal Reserve are targeting inflation, which has helped steady rates and restore market confidence. Softening inflation figures and sustained growth in the economy are projected to be positive for Indian stocks. Healthy developments globally also help.
Banking Sector Mergers and Acquisitions
Banking stocks were mostly range-bound while IT stocks were the biggest contributors to the rally, providing more than 50% of Thursday’s upmove. The Bank Nifty may take a breather in the short future, with experts anticipating it to trade in the range of 57,500 and 58,500. The short term stop does not change the underlying favorable structure.
Some experts see the current consolidation in banking equities as a buying opportunity. Over the previous two weeks the lows have been quite similar at approximately 57,000 and this has created a key short-term support level. There is scope for a staggered accumulation of quality banking equities in anticipation of the next leg of the rising advance.
Market Recap
Indian benchmark indexes ended higher for a second straight session, led by a comeback in IT sectors. The NSE Nifty 50 was up 0.71% at 24,175.70 and the BSE Sensex added 0.75% to 77,502.12. The positive momentum and technical strength indicate that the market is aiming to construct a basis for additional gains. If global conditions stay conducive, the Nifty is eyeing a breach above 24,250. Investors should be careful around support levels but the long term outlook is still positive.
