Sensex up 400 pts, Nifty above 24,750: Value buying among key factors behind market rise

Investors found value in the markets after both indexes fell 2.7% last week. They have logged losses in each of the last six sessions as a hike in H-1B visas and steep tariffs on branded drugs delivered a fresh blow to sentiment and worsened foreign selling.

Barring FMCG, all the major sectors logged decent gains in early trade. The broader small-caps and mid-caps rose 0.45% and 0.56%, respectively. Nifty IT index snapped six-day fall on September 29 and climbed 0.6%.

"Technically the market continues to be weak, but it has reached oversold levels and , therefore, a short-term bounce back is likely any time. However, if any rally is to sustain the market needs positive news particularly on the trade deal with the US. Therefore, the market focus will be on that," said VK Vijayakumar, Chief Investment Strategist, Geojit Investments Limited.

"The absence of any negative further developments over the weekend is being perceived constructively, but investor sentiment remains restrained by steep U.S. tariffs and H-1B visa fee hike," Abhishek Goenka, founder and CIO of wealth management platform Billionz told Reuters.

"In the medium term, we expect the Nifty to trade within a 24,500–25,000 range, consolidating with a modest weakening bias."

"Given the prevailing uncertainty and heightened volatility, traders are advised to maintain a cautious “wait-and-watch” stance, especially in leveraged positions. Booking partial profits on rallies and keeping tight trailing stop-losses remain prudent. Fresh long positions should only be considered if the Nifty sustains above the 25,000 mark. While the broader outlook remains cautiously bullish, close monitoring of breakout levels and global market developments will be essential in the sessions ahead," said Amruta Shinde, Technical & Derivative Analyst at Choice Equity Broking Private Limited.

2) Positive global cues

Positive global cues also weighed on the Indian equities as the US stocks ended higher on Friday, after mostly in-line US inflation data.

The S&P 500 gained 38.98 points, or 0.59%, to end at 6,643.70 points, while the Nasdaq Composite gained 99.37 points, or 0.44%, to 22,482.07. The Dow Jones Industrial Average rose 299.97 points, or 0.65%, to 46,247.29.

In the 12 months through August, PCE inflation increased 2.7% after climbing 2.6% in July. Solid U.S. consumer spending in August underscored the economy's resilience.

On September 29, Wall Street futures were trading in firm green with Dow futures trading 0.35% higher while Nasdaq futures were 0.4% higher. S&P 500 futures were trading 0.3% higher.

China and Hong Kong stocks also rose on September 29, as shares of carmakers and solar energy firms jumped on signs that Beijing's crackdown on price wars is starting to bear fruit.

Sentiment was also aided by China central bank's pledge to step up policy support for growth.

China's industrial profits jumped 20.4% in August from a year earlier, reversing a 1.5% year-on-year decline in July, showed data released on Saturday.

3) Crude prices fall

Oil prices fell on September 29 after Iraq's Kurdistan region resumed crude oil exports via Turkey over the weekend and as OPEC+ plans another oil output hike in November, adding to global supplies.

Consequently, Nifty Oil & Gas was the top sectoral gainer on September 29 by trading 1.5% higher with Petronet, HPCL, BPCL leading gains.

Multiple brokerages also said they see stable fuel prices and focus on improving market capitalisation as positives, reported Reuters.

Brent crude futures dropped by 34 cents (0.5%) to $69.79 per barrel as of 03:30 GMT, following their highest close since July 31 on Friday. Meanwhile, U.S. West Texas Intermediate (WTI) crude slipped 43 cents (0.7%) to $65.29 per barrel, erasing most of the previous session's gains.

On Saturday, crude oil began flowing again through a pipeline from Iraq's semi-autonomous Kurdistan region to Turkey, a first in two and a half years, after a temporary agreement ended a long-standing impasse, according to Iraq's oil ministry.

This deal, involving Iraq’s federal government, the Kurdistan Regional Government (KRG), and foreign oil companies in the area, enables between 180,000 and 190,000 barrels per day to be transported to Turkey’s Ceyhan port, Iraq’s oil minister told Rudaw, a Kurdish news outlet.

The U.S. had advocated for the pipeline’s reopening, which is anticipated to eventually restore up to 230,000 barrels per day to global markets, thus coinciding with OPEC+ efforts to increase production and secure a larger share of the market.

Technical View

Shrikant Chouhan, Head Equity Research, Kotak Securities:

"We believe that the short-term market trend is weak, but due to temporary oversold conditions, we could see a pullback rally from the current levels.

"For traders, 24,800/81,200 would act as a key level to watch. Below this, the correction wave is likely to continue. On the downside, the market could retest the levels of 24,500/80,300. Further declines may also occur, potentially dragging the index down to 24,350/79800, 24,300/79,600. Conversely, above 24,800/81,200, a pullback formation could continue up to 25,000-25,100/81,800-82,200.

"For Bank Nifty, the 20-day SMA or 54,750 would be a crucial zone. Below this, the chances of hitting 54,000-53,800 increase. However, if it sustains above the 20-day SMA or 54,750, it could bounce back to the 50-day SMA or 55,300-55,500.

"Short-term traders should remain cautious and be very selective, as there is a risk of getting trapped at lower levels."

With inputs from Reuters