Dalal Street Corner: Ahead of earnings season, Investors richer by 5.3 lakh cr in 2 sessions as bulls take control; what should they do on Friday?

The investors were richer by more than five lakh crore in the last two sessions as the market remained upbeat ahead of the earnings season. IT giant Tata Consultancy Services (TCS) will kick-off the current financial year's first corporate earnings season on Friday, July 8, 2022.  

The market capitalisation of the BSE listed companies rose by 5.35 lakh crore in the last two sessions as market rallied amid softening of oil prices, entry of southwest monsoon and Foreign Institutional Investors (FIIs) mellowing down their sell off in the Indian market. Against over Rs 45.29 lakh crore market-cap of the BSE companies on July 5, the market cap rose to more than Rs 50.64 lakh crore on July 7.   

Benchmark indices gained nearly one per cent amid support from broader market and select sectoral indices. The Barometer index Nifty50 rose by 0.89% and headline Sensex surged 0.8% to settle at 16,132.90 and 54,178.46 respectively. Nifty midcap and smallcap indices outperformed the benchmarks as they ended with 1.3% and 1.5% gains respectively. Nifty Metal gained 3.67% and PSU Bank rose by 3.4% to lead sectoral indices, while FMCG was the only index to end with marginal cuts.  

Meanwhile, after turning net buyer on July 5 by purchasing worth Rs 1,295.84 crore in the Indian market, FIIs sold Rs 330.13 crore against DIIs buying 1,464.33 crore on Wednesday.  

The market breadth showed a marked improvement with 2266 stocks advancing against 1022 declining on the BSE.  

As bulls took control of the market with two-day back-to-back rally, where in Nifty managed to end above 50-day moving average, here is what experts make of Thursday's trading session. 

Rupak De, Senior Technical Analyst at LKP Securities  

The Nifty started with gap up and remained in a range throughout the day, keeping the morning gain intact. At the end of the session, the Nifty managed to close above its 50-day moving average, suggesting a bullish trend reversal. The momentum indicator has been in a bullish crossover for the last few days, indicating ongoing bullish momentum. Over the short term, the headline index may move towards 16400 if it sustains above 16100. On the lower end, support is visible at 16000. 

Vinod Nair, Head of Research at Geojit Financial Services  

Domestic bourses mirrored an upbeat mood in global equity markets as investors digested the latest FOMC minutes while falling crude and commodity prices lifted investor sentiments. This upside momentum could dominate the markets in the near-term, underpinned by hopes of reducing inflation. The RBI’s latest slew of measures to boost foreign exchange inflows is expected to aid the tumbling rupee. 

S Ranganathan, Head of Research at LKP securities.  

The penultimate day ahead of the earnings season witnessed buoyancy as Bulls pressed the accelerator with the south-west monsoon lashing the financial capital. Financials led the rally with the market breadth showing a marked improvement as several stocks in the Small & Midcap space saw keen investor interest. Cooling Oil prices coupled with the progress made by the Monsoon has now set the stage for the first quarter earnings beginning tomorrow. 

V K Vijayakumar, Chief Investment Strategist at Geojit Financial Services 

The crash in commodities and RBI's latest initiatives to increase foreign currency inflows have the potential to arrest further depreciation in rupee. This means FIIs are unlikely to sell more. This is positive for markets. 

Leading indicators like demand for housing, autos particularly passenger and commercial vehicles, certain discretionary items like jewellery etc. reflect robust economic recovery in India. 

Gaurav Ratnaparkhi, Head of Technical Research, Sharekhan by BNP Paribas 

The Nifty, with a gap up opening, surpassed 16000-mark on July 07. In terms of the technical parameters, it climbed above the 40-day exponential moving average & a falling trendline. It is attempting to fill up a gap area, which was created in June on the daily chart. The upper end of the gap area is 16172. The daily upper Bollinger Band is near 16200. These are key levels on the upside from short term perspective. If the Nifty manages to scale above 16200 then it can head towards 16500. On the other hand, the level of 16000 will now offer support in the case of any dip.  

Anand James - Chief Market Strategist at Geojit Financial Services  

The 16200 objective was put in play yesterday without any deal of dip. is expected to remain in play. Oscillators have begun to show negative divergences, which may bring volatility into the 16100-16200 region. A collapse is less expected though. With several signs of a shift from an oscillating trend to a directional one, we have moved the downside marker from 15500 to 15800, with expectation of 15950 holding most dips before seeing 16200. 

(Disclaimer: The views/suggestions/advice expressed here in this article are solely by investment experts. Zee Business suggests its readers to consult with their investment advisers before making any financial decision.)