Nifty, Sensex trade in green tracking global cues, realty stocks lead, FMCG falls

Investors will track US manufacturing and services data due to be released later in the day along with the new home sales number.

Indian equity markets opened on a positive note mirroring overnight surge in the US markets and subsequent gains in Asian equities on April 23. At 9:16am, the Sensex was up 205.86 points or 0.28 percent to 73,944, and the Nifty was up 45.90 points or 0.21 percent to 22,414.

The market breadth was in favour of gainers as around 1,729 shares advanced, 418 declined, and 94 were unchanged.

Earnings have taken centre stage among investors with some of the key heavyweights announcing their numbers this week. Analysts expect the market to maintain its ongoing positive momentum along with stock-specific action with key results, including Axis Bank, HUL, Dalmia Bharat, and Indian Hotels watched keenly.

Investors will track US manufacturing and services data due to be released later in the day along with the new home sales number.

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Sectoral view

All NSE sectoral indices were trading higher, except FMCG. Nifty Media led the gainers, rising over 1 percent, while Nifty Healthcare and PSU Banks followed with around half a percent rise. The Nifty FMCG index fell over 0.24 percent, dragged by Tata Consumer Products, which lost over 3 percent after disappointing Q4 earnings.

Fundamental view

The tone for the Nifty is likely to remain positive on a sharp dip in the volatility index India VIX, said Ajit Mishra – SVP of research at Religare Broking Ltd. "Traders should continue with a stock-specific approach and utilise corrections to accumulate quality names," he said.

The ability of the market to climb all walls of worries is being shown by the bulls of Dalal Street, shrugging off all headwinds, be it geopolitical or economic. The Middle East tensions had only a temporary impact on the market, according to VK Vijayakumar, chief investment strategist at Geojit Financial Services.

"The scaling down of rate cuts by the Fed from six at the beginning of this year to three or perhaps two or even lower also has not impacted the bull run. And, the indication from the sharp decline in the volatility index VIX by around 20 percent to 10.2 is that the downside risk to the market is low," he said.

According to Vijayakumar, it makes sense to remain invested in this market and to continue investing by buying the dips. "Since the US 10-year bond yield continues to remain above 4.6 percent FIIs will remain sellers putting pressure on largecaps like leading private sector banks. For long-term investors, this segment is a buying opportunity," he added.

Technical view

On the daily charts, the Nifty is consolidating around the 22,400 mark which coincides with the 61.82 percent Fibonacci retracement level of the previous fall from 22,776 to 21,777 and also the lower end of the gap area formed on April 15, according to Jatin Gedia – Technical Research Analyst at Sharekhan by BNP Paribas.

"A brief consolidation is likely considering the sharp run-up and the hourly momentum indicator turning negative suggests that there could be a few range-bound days of price action ahead. On the upside we expect Nifty to target levels of 22,560 from a short-term perspective," he said.
Bank Nifty managed to close marginally in the green in the previous session. "In case of a dip towards the support one of 47,700 – 47,620, it should be used as a buying opportunity. Once this consolidation is over, we can expect the next leg of the upmove to resume for a target of 48,500 – 48,700," Gedia said.

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