Sensex, Nifty break 2-day losing streak, Bank Nifty gains 1%; buying across markets ahead of results

The domestic benchmark indices — S&P BSE Sensex and Nifty 50 — broke a two-day lull and edged higher on January 4 as investors shopped across large-caps, mid- and small-caps. This buying behaviour comes ahead of India Inc’s announcement of October-December (Q3FY24) quarter performance, wherein the Street is expecting strong results to support underlying fundamentals.

On January 4, the S&P BSE Sensex and NSE Nifty 50 gained up to 0.7 percent to 71,889 and 21,658, respectively. Broader indices — Nifty Midcap 100 and Nifty Smallcap 100, on the other hand, gained over 1 percent each.

The overall market mood defied the US market, which ended lower overnight after the FOMC minutes reading revealed uncertainty over the rate cut timeline. While swaps traders were anticipating the rate cut to happen sooner but it is likely to be delayed, said market watchers.

Ashutosh Sharma, Head, Forrester Research India told Moneycontrol that the rate cut may be delayed to the second half of 2024 as not much has changed on the macro-economic level. “US inflation is still above comfort levels, hence Fed is again on the wait-and-watch approach,” he said.

Once the rate cut materialises by the global central bank, the Reserve Bank of India (RBI) may also follow suit bringing relief to export-oriented industries and technology companies.

Despite mixed global signals, Indian markets exhibited resilience in Thursday’s trade amid Nifty’s weekly expiry. “The immediate resistance for Nifty is identified at 21,700 levels, while the support zone extends from 21,400 to 21,450,” said Shrey Jain, Founder and CEO of SAS Online – India’s Deep Discount Broker.

The lead sectoral performer on January 4 was the Nifty Realty index as it hit a record high of 836.45. The gains were led by Sobha which zoomed 20 percent to a new record high after Motilal Oswal Financial Services said the stock is one of its top picks for 2024.

ALSO READ: Nifty realty surges to all-time high; Macrotech Developers, Sobha, DLF shares rise up to 20%

Joining Realty, all sectors including Financial Services and Oil & Gas sectors also fared well on January 4. As a result of this, the fear gauge India VIX, which was hovering around a 9-month high in previous sessions cooled off by 4 percent to 13 levels.

Banking and non-bank lenders also dominated the Street after their December quarter business update. Bajaj Finance soared over 4 percent after the company’s asset under management (AUM) crossed Rs 3 lakh crore mark for the first time. Additionally, shares of IndusInd Bank hit a 52-week high on 20 percent on-year growth in Q3 advances.

At this time of consolidation, market experts recommend traders sell on every rise and buy on every decline as India’s fundamentals remain strong against emerging as well as developed market peers.

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