Dalal Street Corner: Investors wealth grows by nearly 8 lakh crore in 3-day rally; what should investors do on Tuesday?

The three-day rally in the market saw investors' wealth surging by nearly 8 lakh lakh crore. On Monday, the Indian market ended nearly two per cent higher as Nifty50 gained 1.89% and 1.90%, extending the rally that started on May 26 for the third straight day. The market capitalisation of the BSE-listed companies rose from Rs 2,50,50,792.13 lakh crore on May 26 to Rs 2,58,42,512.83 lakh crore on May 30, a jump of 7.92 lakh crore, amid anticipated short-term rally in the market.  

The recovery in the market has been largely led by IT, auto and banking stocks in the past three sessions. On Monday, almost all the sectoral indices contributed to the move wherein consumer durables, realty and IT were the top gainers.  IT, Realty and Consumer Durable stocks surged as they settled with gains of 3.88%, 4.06% and 4.22% respectively. The broader markets too witnessed healthy traction wherein Midcap and Smallcap ended higher by more than 2% each. 

Meanwhile, amid strength in the market, headline indices Nifty 50 closed at 16,661.40 and the Sensex settled 55,925.74.  

Among stocks, Mahindra and Mahindra was the top gainer on the benchmarks after the auto major reported healthy q4 earnings, while Kotak Bank declined the most.  

As the market extended its rally for the third day and surged nearly four per cent in the last three sessions, here is what experts say about current trends in the market.  

Vinod Nair, Head of Research at Geojit Financial Services. 

A near-term trend reversal is visible in the domestic market, supported by valuation comfort and positive trend in the global counterparts. US Stocks were boosted on softening inflation worries, which will be a crucial factor in deciding the tone of the upcoming Fed policy meeting.  

The easing of long-running lockdown in China also helped in lifting the sentiments across Asian markets. The market is expected to have a positive run in the near term. However, the impact of central bank policies will be a key factor to be monitored.  

Ajit Mishra, VP - Research, Religare Broking Ltd 

Markets ended the 3-week long consolidation phase and gained over 2%, tracking firm global cues. After the gap-up start, the benchmark inched gradually higher in the first half, however, marginal profit taking around 16,700 zone capped the upside.   

Markets have regained some strength citing the less hawkish tone of the US Fed in the recently released meeting minutes. On the domestic front, the early onset of monsoon has further lifted sentiments.  

Going forward, with earnings season largely behind us, upcoming macroeconomic data i.e. GDP numbers and PMI data and auto sales will be in focus for cues. Amid all, we reiterate our positive view and suggest maintaining “buy on dips” till the Nifty holds 16,300. 

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

The Nifty had seen a strong momentum built-up in the last couple of sessions. Consequently, with a big gap-up opening the index crossed the crucial 16400 mark on May 30. It went on to fill up a gap area that was created in the beginning of May.  

Post that, the Nifty consolidated its gains throughout the day. The overall structure shows that the index is on the course towards 17000 from short term perspective. On the other hand, 16500-16400 will now act as a support zone as per the principle of role reversal. Thus, the short-term traders can continue to ride the trend with reversal trailed to 16400. 

S Ranganathan, Head of Research at LKP securities 

Benchmark Indices were up 2% in Afternoon Trade today led by IT, Auto & state-owned banks buoyed by global cues, a pause in the upward trajectory of the Dollar Index and early arrival of monsoon in the state of Kerala.  

The broader markets too mirrored the same trend with both the Midcap & Smallcap indices rising 2% in today's trade. We did witness keen interest in Footwear, QSR and Realty stocks with many of them recording smart up-moves. 

V K Vijayakumar, Chief Investment Strategist at Geojit Financial Services 
Financials, particularly the leading banks, have more room to go up assisted by delivery based investment buying. However, Brent crude at $ 120 is a major macro headwind. 

(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.)