Sensex surges 1,000 pts, Nifty tops 21,650: Asian cues among key factors driving Dalal Street

Gainers outnumbered laggards in trade on January 29.

The benchmark Nifty and Sensex kickstarted the week with a strong up-move, rising over 1.5 percent each on January 29. With a flurry of key events lined up through the week, including the Interim Budget and the US Federal Reserve's monetary policy meeting, experts anticipate the rest of the week to witness bouts of volatility.

At 12.47 pm, the Sensex was up 1,064.50 points or 1.51 percent at 71,765.17, and the Nifty was up 335.20 points or 1.57 percent at 21,687.80.. About 2,070 shares rose, 1,223 fell, while 111 remained unchanged.

Let's take a look at the factors that contributed to the rise on January 29:

Positive Asian cues

Most markets across Asia inched higher in trade on January 29, which also aided the sentiment for domestic equities. Japan's benchmark Nikkei 225, Hong Kong's Hang Seng and South Korea's Kospi surged around 1 percent each.

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Heavyweights lend support 

Several index heavyweights surged in trade which strengthened the up-move for the two benchmarks. Reliance Industries surged 5 percent to scale a fresh record high while financial bellwethers like HDFC Bank, Axis Bank, Kotak Mahindra Bank and ICICI Bank gained 1-3 percent each. Construction major Larsen and Toubro also rose over 3 percent.

These stocks contributed a cumulative of around 215 points of the Nifty 50's total 335 point upmove.

Broad-based gains

Gains in the market were also broad-based as, barring information technology, all sectors glimmered in the green. The market breadth also favoured gainers as nearly two stocks rose for each one that fell.

Sectors like banks, both private and state-run lenders, energy, infrastructure, power, automobile, metals and capital goods posted gains of 1-4 percent.

The broader market also fared well, with the smallcap and midcap indices surging around 1 percent each.

Key levels to watch

The Budget week is known for volatility, and considering that, Sameet Chavan, technical analyst at Angel One, leans on the bearish side. He believes levels around the psychological 21,000 mark, which also coincides with the 50-day simple moving average (SMA) remain crucial.

"In case of any negative surprises from the Budget or the FOMC meeting, the Nifty may decline towards 20,800 or even towards the bullish gap of 20,500. On the flip side, resistance is anticipated near 21,500 and the week's high of 21,750 which are seen as formidable obstacles before the Nifty targets the recent landmark high of around 22,100," Chavan said.

He also foresees high volatility, especially on the budget day, where the market will witness wild swings in response to announcements by the finance minister. Thus, he advises traders to exercise caution, avoiding undue risks until there is greater clarity.

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