The stock indices, Sensex and Nifty, commenced the trading week on a high note, propelled by encouraging global signals. Sensex saw a gain of 178.02 points, opening at 74,064.96, while Nifty registered a rise of 49.35 points, starting the day at 22,523.30.
In the initial trading session, 31 Nifty companies witnessed advancement, while 19 experienced declines. Noteworthy gainers included Britannia, Kotak Bank, JSW Steel, Maruti, and TCS, whereas Titan, SBI, Shri Ram Finance Limited, Adani Ports, and Adani Enterprises faced losses.
Varun Aggarwal, Profit Idea’s founder and managing director, expressed, “The positive momentum in the Indian markets mirrors the trend in Asian equities, which as expected opened strong on Monday. This optimism stems from China’s return from holiday and a softer-than-expected US jobs report, which has revived hopes for Federal Reserve rate cuts. US stock futures edged higher, with contracts in Australia and Hong Kong pointing to gains.”
Last week, global stocks witnessed a buoyant trend, accompanied by a rally in US Treasuries on Friday. Australian and New Zealand bonds also experienced an uptick, fueled by weaker-than-estimated data points, which led to the US Economic Surprise Index hitting its lowest since February 2023.
Despite the positive sentiment, technical indicators for Nifty 50 are urging caution. The index formed a bearish engulfing pattern on the daily chart, indicating potential weakness ahead. The weekly chart reflects a gravestone doji pattern, hinting at a potential reversal.
The short-term trend has shifted downwards, with immediate resistance observed at 22,600 and further downside levels at 22,120. Traders are closely monitoring central bank meetings scheduled for this week, including the Reserve Bank of Australia, anticipated to adopt a hawkish stance. Additionally, Chinese activity data and inflation readings in key emerging markets are under scrutiny.
Oil prices experienced an uptick following Israel’s closure of the Kerem Shalom humanitarian crossing into Gaza, coupled with Saudi Arabia’s decision to raise crude prices to Asia, tightening the oil market.
The positive beginning for Sensex and Nifty reflects broader optimism in global markets, driven by favorable economic indicators and central bank policies. However, technical patterns suggest potential challenges ahead, emphasizing the importance for investors to remain cautious amid prevailing uncertainties.
