Dalal Street Corner: Markets close Monday’s session at 2-month high – What should investors do on Tuesday?

The Indian markets rise for the second straight day to close at a 2-month high on Monday. The frontline indices such as Nifty50 rose above the 18,000-mark and the Sensex closed near 60,400-level. 

Banking stocks, especially private bank stocks, lead the market higher with Nifty Bank rising nearly 2 per cent to 38355. ICICI Bank, Infosys, HDFC, Kotak Bank and L&T became the top Nifty contributors.

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While UPL is the top Nifty gainer up over 4 per cent, followed By Titan, Hero Moto each surged over 3 per cent, similarly, Maruti and Tata Motors each gained around 3 per cent at the market close. 

In the mid-cap segment, India Cements gained another 5 per cent on Monday, to touch a new 52-week high. While SBI card slipped over 2 per cent after Goldman Sachs initiates coverage with sell call and Paytm shares fell 6 per cent following Macquarie’s note with a target of Rs 900 per share. 

On increased demand, auto stocks continue the gaining momentum, as 3 out of top five gainers are auto heavyweights on Nifty50. Infosys and TCS close in the green while Wipro slips ahead of results, in the IT sector. And, PSU banks rise on reports of FDI limit rise, PNB and BoB up 4-5 per cent. 

Vinod Nair, Head of Research at Geojit Financial Services said that the domestic market displayed strong momentum on expectations of a healthy start to the earnings season amid weak global markets and rising covid cases. 

PSU Banks led the sectorial rally as reports suggested an increase in FPI limits while the realty sector followed the trend on robust sales numbers and expectations of support measures in the upcoming budget, the market analyst said in a post-market comment. 

Globally, bourses were muted as reports of record-high Eurozone inflation at 5 per cent kept investors on edge while awaiting the release of the US inflation data later this week which is expected to remain elevated, Nair added. 

S Ranganathan, Head of Research at LKP securities said, “Indices were up a percentage ahead of the third-quarter earnings season this week despite a rise in covid cases. Nifty50 reclaimed the 18,000-mark, as Banks led the rally on expectations of better loan growth with provisional numbers pointing towards improved third-quarter performance.” 

According to Vijay Dhanotiya, Senior Research Analyst at CapitalVia Global Research Limited, “Our research suggests that sustaining above 17800 will be an important level for the market to stay positive in the short term.” 

He added, “Technical indicator suggests, a volatile movement in the market. As such we retain our cautious stance and advise the traders to refrain from building a fresh buying position until we see further decisive movement in the market above the level of 18000.”