Sensex gains on last trading day of FY24, Nifty has to hold above 22,200 for further upside

Nifty's sustenance above the 22,200 level may lead to further gains towards 22,400, say analysts

Indian equity benchmarks the Sensex and the Nifty gained for the second consecutive day on March 28, the last trading day of financial year 2023-24 and also the monthly F&O expiry. Analysts expect the bullish sentiment to prevail in the near term, if the Nifty holds above 22,200.

At 9.30 am, the Sensex was up 0.43 percent at 73,310.64 and the Nifty 0.42 percent at 22,216.3. About 2,029 shares advanced, 773 declined and 103 were unchanged.

Mandar Bhojane, Research Analyst at Choice Broking, said that if the Nifty's sustains above 22,200, it can move towards 22,400 and 22,500 levels in the coming days.

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Vaishali Parekh, Vice-President of Technical Research at Prabhudas Lilladher also believed that the Nifty would need a decisive breach above 22,300 level to establish conviction for further upward move. "The support for the day is seen at 22,000 level, while the resistance would be seen at 22,300," she added.

Broader markets were also on an upswing within the first hour of trade as Nifty Midcap 100 and Nifty Smallcap 100 indices gained up to 0.5 percent. Fear gauge India VIX, meanwhile, gained 0.5 percent to trade around 12.7.

All sectors traded in a positive territory, with Nifty PSU Bank and Healthcare indices leading the surge, followed by Nifty Media and Nifty Financial Services indices.

Nifty PSU Bank index, in particular, has surged 90 percent in FY24. This has further potential to go up as there is plenty of valuation comfort available, opined VK Vijayakumar, Chief Investment Strategist at Geojit Financial Services.

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The primary catalyst for the ongoing rally, analysts said, are the huge liquidity flows into market. "Since flows into the market continue and are showing no signs of slowdown, a scramble for high quality stocks with good growth prospects is likely," said Vijayakumar of Geojit Financial Services.

In the last 7 days, domestic institutional investors have pumped around Rs 24,373 crore into Indian equity markets.

Globally, all major averages in the US markets ended higher overnight as investors keenly await US consumer inflation report. Dow Jones, tech-heavy NASDAQ Composite, and the S&P 500 indices surged up to 1.2 percent on March 27.

Investors are gearing up for the release of US Personal Consumption Expenditure (PCE) price index for February on March 29. This inflation metric is usually preferred by the Federal Reserve to shape potential interest rate adjustments in the months ahead.

Since its peak, PCE inflation has shown signs of easing, with the headline PCE index recording a 2.4 percent year-over-year increase in January 2024, the smallest in almost three year. Market participants are waiting for the February inflation data to see if these unexpected price increases will also show up in the inflation measure that the Federal Reserve prefers. This might ruin hopes for a future reduction in interest rates.

Meanwhile, Japanese stocks lead weakness in Asian markets, with Nikkei 225 index falling 1 percent as local currency yen continued to hit weakest level against the US dollar index in 34 years. Australia's S&P 200 index, however, bucked the trend and rose 0.9 percent to hit an all-time high of 7,901, while Hong Kong's Hang Seng was up 1.6 percent.