Mid-day Mood | Upbeat global cues drive Nifty above 21,700, Sensex rises 640 points

Once Nifty crosses 21,800 levels, it can move higher towards 22,000 levels, said analysts

Buying made its way into the domestic market on January 9 as positive cues from global markets added fodder to D-Street bulls. Easing US bond yields, a sharp fall in crude prices, and a lower dollar index also supported the investor sentiment. Further strengthening the move were gains in index heavyweights like Infosys, TCS, L&T, HDFC Bank, and ICICI Bank.

Around noon, the Sensex was up 641.40 points or 0.90 percent at 71,996.62, and the Nifty was up 197.30 points or 0.92 percent at 21,710.30. Market breadth also favoured gainers as more than two stocks rose for each one that fell. Likewise, trend in the broader market also remained positive as small and mid-caps saw buying.

Follow our market blog to catch all the live action

Expectations of an easing macro environment on the back of a cut in interest rates made investors positive over IT stocks in the run-up to the Q3 earnings season. On that account, the Nifty IT index was one of the best performing sectors, up over 1 percent.

Bargain buying also seeped into banking stocks which lifted the Nifty Bank index. Other sectors like automobile, energy, infra, pharma, FMCG and realty also fared well.

"Long positions are steadily declining and short positions are building up. This short build up is on bearish expectations that the present high valuations are difficult to sustain and some triggers may lead to sharp corrections. This expectation need not be realised since global cues have again turned positive on a rally in the US market," said VK Vijayakumar, Chief Investment Strategist at Geojit Financial Services.

"Strong JLR numbers from Tata Motors and the attractive buy back offer from Bajaj Auto will give support to the Nifty Auto index. The real estate segment is doing well and the margin expansion happening in the industry bodes well for the sector. But the good news is in the price," he added.

"The Nifty after the small pullback, once again witnessed a big bearish candle with heavy profit booking seen to erode the gains and has arrived near the crucial support zone of 21,500 levels with bias turning cautious. The next important support level would be near 21,350 levels, below which the bias and sentiment shall turn weak," said Vaishali Parekh, vice-president for technical research at Prabhudas Lilladher.

Parekh also warned against anticipated  and with the result season beginning, volatility and fluctuations in the market. "The support for the day is seen at 21,350 while the resistance is seen at 21,650 level," she added.

Key Nifty gainers Adani Ports and SEZ, Hero MotoCorp, Adani Enterprises, L&T, Apollo Hospitals

Key Nifty losers Nestle, Britannia, UPL, ONGC and Asian Paints

Key Sensex gainers L&T, Infosys, Sun Pharma

Key Sensex losers Nestle, Asian Paints

Bajaj Auto: Shares jumped 5 percent after the company announced an attractive share buyback price of Rs 10,000 per share. However, even though the buyback price looks attractive, most retail shareholders may not be able to receive this bonanza, as the small size of the buyback offer will limit the acceptance ratio to under 10 percent, according to Nuvama calculations.

Zee Entertainment: Shares crashed 10 percent after reports said that Japan’s Sony was planning to scrap the merger of its Indian unit with the firm more than two years the $10 billion deal was announced.

Lemon Tree: Shares gained 2 percent in opening trades a day after Lemon Tree Hotels announced the signing of its latest property in Meerut.

Also Read | Firm global cues lift Sensex about 600 points; Nifty may race to 22,000