Indian benchmark indices gained on May 10 following upbeat trends in global markets, with NSE Nifty 50 rising above 22,100, and BSE Sensex climbing over 500 points. The gains come after the previous session's plunge, which dragged the benchmark indices down about 1.4 percent, with Nifty closing below the psychological mark of 22,000.
At 9.30 am, the Sensex was up 530 points or 0.7 percent at 72,934, and the Nifty 50 was up 151 points or 0.7 percent at 22,108.50.
Today's optimism seems to stem from higher-than-expected increase in the latest US weekly jobless claims data, which fueled speculations of an early rate cut by the US Fed. The 10-year benchmark US Treasury Yield eased to 4.45 percent overnight from 4.48 after the unemployment data. Gold and silver shined amid this speculation, and Brent Crude neared $85/barrel on hopes of demand revival.
Broader market recovered from the losses seen in early trade. While BSE Midcap was up 0.3 percent, BSE Smallcap gained 0.1 percent.
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Notwithstanding today's gains, Indian markets are still grappling with election-results uncertainty, fretting about the margin of victory for the incumbent BJP-NDA government. Nifty is about 4 percent off the all-time high hit earlier last week. There is a lot of speculation and anxiety on the Street about the election results, which is keeping the markets nervous. However, if the Nifty closes above 22,000 today, then there could be some relief, said Kranthi Bathini, Equity Strategist at WealthMills Securities.
Now, 21,800 and 21,700 are identified as major support levels for Nifty 50, said Mandar Bhojane, Research Analyst, Choice Broking. "If Nifty 50 reverses strongly from these support levels and closes above 22,000, it may further ascend to 22,200 and 22,300 levels," he said in a note.
On the other hand, the correction provides ample opportunities for long-term accumulation, said experts. "Any further correction presents a favorable buying opportunity for portfolio building," suggested Ruchit Jain, Lead Research Analyst at 5Paisa.
Sectors such as FMCG, consumer durables, defense, and PSU banks are perceived as favorable in such market conditions. Analysts are now looking forward to forthcoming inflation data, due next week, for deeper insights into the US economic condition.
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