Bulls roar on D-Street: Nifty flies 500 points to top 23,300, Sensex jumps 2%; auto stocks zoom 8%

Some experts adivcse that investors' strategy should focus on buying on dips around support levels.

India's frontline equity indices Nifty 50 and Sensex jumped in the early session on April 15, as positive global cues improved investor sentiment, leading the bulls to take over the reins on Dalal Street.

At 10:26 am, the Sensex was up 1,598.05 points or 2.13 percent at 76,755.31, and the Nifty was up 485.80 points or 2.13 percent at 23,314.35. About 2827 shares advanced, 452 shares declined, and 159 shares unchanged.

With the intraday gains, the Nifty 50 and Sensex have erased all the losses seen after the U.S. tariff announcement on April 2.

All sectoral indices traded in the green, with Nifty Auto jumping nearly three percent to lead the pack. The Nifty Bank index soared two percent, while the IT, pharma, and metal indices also recorded strong gains.

The broader markets underperformed the benchmarks, as the Nifty Smallcap 100 and Nifty Midcap 100 gained 1.3 percent each. The fear gauge, India VIX, cooled 17.4 percent to hover near the 16.6 mark, indicating decreased volatility.

Among the key gainers, auto and auto component stocks saw strong buying after U.S. President Donald Trump signalled potential relief for carmakers grappling with high import tariffs. Tata Motors, M&M, Bharat Forge and SAMIL shares soared up to eight percent in the early session.

Further, U.S. President Donald Trump's pause on tariffs for 90 days is also lending cheer to the markets, coupled with the Reserve Bank of India's (RBI) Monetary Policy Committee decision to trim the benchmark lending rate by 25 basis points to 6 percent.

"Trump’s pivot indicates a more conciliatory approach and opens the way for negotiations. While we may have seen the worst of trade uncertainty, the road ahead is still rocky. Nevertheless, with volatility near historic extremes, there is more potential for a decline than an increase," Devarsh Vakil, Head of Prime Research, HDFC Securities said.

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Global cues positive 

Overnight, Wall Street settled higher, with iPhone maker Apple giving the S&P 500 its biggest boost as the White House exempted smartphones and computers from new tariffs. The Dow Jones Industrial Average rose 0.78 percent, the S&P 500 gained 0.79 percent and the Nasdaq Composite rose 0.64 percent in trade.

However, uncertainty over future tariffs kept a lid on optimism, with the main indices finishing off their highs of the day. Investors remained worried about how companies will manage supply chains as more changes are expected on the tariff front.

Tracking Wall Street's cues, Asian markets also gained in early trade on Tuesday. Asian bourses traded in a sea of green, with Japan's Nikkei 225 jumping over one percent, while South Korea's Kospi and Kosdaq indices reported strong gains. Hong Kong's Hang Seng index also ticked up 0.4 percent.

Technical Levels

On a technical basis, the market may encounter resistance at 23,300/23,500 levels. "Crossing and closing above 23,800 levels would indicate a potential move towards higher targets, which would ultimately test the strength of the long-term market trend. Conversely, if the market sustains below the 22,800 level, it could lead to gradual weakness towards 22,500", said Shrikant Chouhan, Head Equity Research, Kotak Securities.

FIIs extend selling streak

On the institutional front, Foreign Institutional Investors (FIIs) continued their selling streak for the ninth consecutive session on April 11, offloading equities worth Rs 2,519 crore. In contrast, Domestic Institutional Investors (DIIs) remained net buyers, purchasing equities worth Rs 3,759 crore on the same day.

Derivatives positioning 

Open Interest (OI) data reveals heavy call writing at the 23,000 and 23,200 levels, suggesting strong resistance. On the other hand, robust put writing at 22,500 reflects a strong support base.

Strategy for traders and investors?

Going ahead, investors will pay close attention to the inflation (CPI) number which will be unveiled later today. Further, the earnings season for the quarter ended March, which kicked off with IT giant TCS on April 10, will also guide traders.

Shrikant Chouhan, Head Equity Research, Kotak Securities added that considering the breadth of the market, he believes the markets have likely experienced their worst phase for at least the medium term. Going ahead, the strategy should focus on buying on dips around support levels.

Mandar Bhojane, Research Analyst, Choice Broking concurred, saying, "Overall, while the bulls seem to hold the current momentum, intraday volatility and profit booking near resistance zones remain likely. Traders are advised to remain cautious near upper resistance levels and consider buying on dips toward key support zones."

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