The benchmark indices ended with gains on February 19, led by FMCG and energy stocks. Nifty settled below its all-time high of 22,186.65, hit earlier in the day. Analysts believe that investors must monitor global developments, particularly since there are no major domestic events expected in the near term.
These global factors are likely to have a substantial impact on market movements. Stock-specific actions are to be looked at for potentially outperforming moves, analysts said.
The Sensex closed 281.52 points or 0.39 percent higher at 72,708.16, and the Nifty rose 81.55 points or 0.37 percent to 22,122.25. About 2,127 shares advanced, 1,312 declined, and 110 remained unchanged.
In the broader markets, BSE Midcap and Smallcap indices rose 0.3 percent and 0.7 percent, respectively.
Sectorally, Nifty FMCG and Energy led the gains, rising over one percent each. Nifty Pharma also gained nearly one percent. Except Nifty IT, which was down marginally, all other NSE sectoral indices were trading higher.
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Fundamental view
“There is tremendous investor confidence among domestic investors. Even when FPIs are selling occasionally, like in October and November, domestic investors are showing confidence in the market, backed by fundamentals,” Nilesh Shah, CEO, Kotak MF told CNBC-TV18.
Earnings growth during Q3FY24, better governance compared to peers, and sound market strength - bearing a few pockets of exuberance - are encouraging further participation, he added. According to Shah, largecaps look far better compared to mid and smallcaps on a risk-adjusted basis.
"An important takeaway from the Q3 results is the improving profitability of India Inc. EBITDA and profit after tax are growing impressively even while sales growth is average. Automobiles, pharmaceuticals and capital goods are doing very well," said V K Vijayakumar, Chief Investment Strategist, Geojit Financial Services.
"In banking, there is impressive credit growth and improving profitability. PSU banks are outperforming private sector banks due to low valuations which continue to be fair even after the run-up in prices," he added.
"Investors should be careful while chasing many mid and small-caps which are rising sharply without fundamental justification. Many of these stocks have very low floating stock and, therefore, can easily be manipulated by a cartel of operators. In the long run, only stocks with strong fundamentals will give steady and good returns," Vijayakumar said.
Technical view
The initial sessions of this week will be crucial to gauge market reactions around the 22,100 - 22,150 zone. A continued upward trajectory beyond this range could signal the start of the next bullish phase, potentially opening doors for the 22,380 - 22,500 zone, according to Sameet Chavan, Head Research, Technical and Derivative - Angel One.
"Conversely, while dips may continue to be bought into, traders are warned against complacency, given recent instances of severe losses among aggressive traders around this zone," he said.
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"Immediate support lies around 21,950 followed by 21,800, with crucial support residing in the 21,550 - 21,500 zone, from where prices rebounded the week. Traders are advised to monitor these levels closely and adjust their trading strategies accordingly, he added.
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