Sensex, Nifty extend gains to 2nd straight day amid strong global cues, macro data

With sentiment changing for the worse, QIP has once again become a buyer’s market

Equity benchmarks Sensex and Nifty extended gains to second straight day amid strong global cues and largely in-line inflation reading. In the absence of any significant selling pressure, market experts observed bullish sentiment intact, which could take markets at new life-time highs in the near-term.

Sensex and Nifty gained up to 0.3 percent to 73,897 and 22,391 on March 13 morning. About 1,654 shares advanced, 932 shares declined, and 90 shares were unchanged in opening deals.

Sameet Chavan, Head Research, Technical and Derivative - Angel One advised traders to adopt a cautious approach as any rebounds in markets could be met with selling pressure. Otherwise, he noted stiff immediate hurdle for Nifty around 22,500-22,550, with crucial support at 22,200.

On the other hand, Vaishali Parekh, Vice-President of Technical Research at Prabhudas Lilladher said that the Nifty is showing resistance near 22,450 zone and support is maintained at 22,250, thereby, having an overall rangebound movement.

Meanwhile, broader markets bled amid concerns of Sebi's tighter norms for mutual fund houses investing in small-and midcap funds. The Nifty Midcap 100 and Nifty Smallcap 100 indices slipped over 1 percent each on March 13 morning.

Sectorally, Nifty FMCG was the top performer led by gains in ITC as BAT offloaded 3.5 percent stake through its wholly-owned subsidiary Tobacco Manufacturers (India) via block deal. Nifty IT and Bank also managed to eke out slim gains within the first hour of trade.

On the flipside, Nifty Metal and Oil & Gas indices were the top sectoral laggards as they declined over a percent each.

ALSO READ: Daily Voice: This fund manager expects Nifty to hold steady but foresees a correction in mid, smallcaps this year

Macro-wise, India's headline retail inflation rate was largely unchanged at 5.09 percent in February, in-line with market expectations. Economists had predicted prices to rise 5.1 percent year-on-year, according to Moneycontrol survey.

With retail inflation remaining within a stable range of RBI's tolerance band, the overall macroeconomic momentum appears unchanged, believe analysts. "Despite anticipated rate cuts by major central banks in advanced economies by mid-year, the RBI is expected to maintain its current policy stance in the near term. The stability of India's macroeconomic environment continues to support orderly developments in its financial markets," said Sujan Hajra, chief economist, Anand Rathi Shares & Stock Brokers.

Globally, the US stock markets ended on a positive note overnight, with the S&P 500 index registering an all-time high as slightly higher-than-expected inflation reading kept investors hopes for interest rate cuts unhindered.

All major averages Dow Jones, S&P 500, and tech-heavy NASDAQ Composite indices gained up to 1 percent on March 12 after the US consumer price index increased 3.2 percent in February, slightly above economists' estimates of 3.1 percent.

Following footsteps of Wall Street, markets in Asia-Pacific also rose this morning. Japan's Nikkei 225 index was up 0.7 percent, while Australia's S&P 200 index rose 0.2 percent, and South Korea's Kospi climbed 0.4 percent.