Nifty extends gains into 6th day; ICICI, Airtel top gainers

Nifty 50 extended its winning streak to six consecutive sessions on Thursday, August 22, driven by positive global cues and rising expectations that the US Federal Reserve may begin cutting interest rates in September.

The Nifty 50 ended the day 41 points or 0.17 percent, higher at 24,811.50 with 27 stocks in the green. On the other hand, the Sensex closed 148 points, or 0.18 percent, up at 81,053.19.

Shares of ICICI Bank, Bharti Airtel, Grasim, Infosys, and HDFC Bank ended as the top contributors to the gains in the Nifty 50 index. Conversely, TCS, Mahindra and Mahindra, NTPC, Tata Motors, and ONGC closed as the top drags on the index.

2.8% gain in six sessions

In the last six sessions of gains, the Nifty 50 advanced 2.8 percent. The domestic market advanced on Thursday, reflecting the upbeat sentiment of major global indices, after the minutes from the recent US Fed meeting indicated that the central bank is contemplating rate cuts. Additionally, a downward revision in US jobs data from the past 12 months further fuelled expectations that the rate cut cycle could begin in a matter of weeks.

The next US FOMC (Federal Open Market Committee) meeting is due on September 17-18.

"Investors are waiting for the outcome of the Fed chair's speech at the Jackson Hole meeting on Friday, which could provide some indication on whether the Fed would announce a rate cut next month," said Prashanth Tapse of Mehta Equities.

The domestic market witnessed broad buying, as the Nifty Midcap 150 and the Nifty Smallcap 250 indices also ended higher by 0.70 percent and 0.32 percent, respectively.

On the BSE, more than 340 stocks, including Ashok Leyland, HDFC AMC, HDFC Life, ICICI Lombard General Insurance, SBI Life, Persistent Systems, and TVS Motor, hit their fresh 52-week highs in intraday trade.

1 lakh crore overall gain

The overall market capitalisation of the firms listed on the BSE rose to nearly ₹460.5 lakh crore from nearly ₹459.2 lakh crore in the previous session, making investors richer by over ₹1 lakh crore in a single session.

"The domestic market witnessed modest gains owing to the positive global sentiments. The recent signs of weakness in the US non-farm payroll data have strengthened the case for potential interest rate cuts in September. However, investors are being cautious in the broader market, opting for a selective approach, and are awaiting more clarity from central bank leaders in Japan and the US," said Vinod Nair of Geojit Financial Services.

According to experts, although global factors shape the Indian stock market, the primary driver behind the domestic market's gains has been the robust participation of retail investors. Their sustained investments have kept the market buoyant, fuelled by the optimistic outlook for the Indian economy.

The number of registered investors on the BSE has reached 18.7 crore, reflecting a 33 percent year-on-year increase and an 8 percent rise quarter-on-quarter.

Nifty 50 technical outlook

Shrikant Chouhan of Kotak Securities believes the short-term market texture is still on the positive side, but due to temporary overbought conditions, there could be rangebound activity shortly.

"For the traders now, buying on dips and selling on rallies would be the ideal strategy. 24,750-24,700 would be the key support zone, while 24,900-24,950 could act as key resistance areas for the day traders. However, below 24,700, the sentiment could change. Below this, traders may prefer to exit from the trading long positions," said Mr Chouhan.

According to Rupak De of LKP Securities, on the daily chart the Nifty continues to move towards the upper Bollinger band. The index has been sustained above the critical near-term moving average.

"Sentiment may continue to favour the bulls as long as it remains above 24,650. On the other hand, the current rise might extend towards 25,000 in the near term," said Mr De.

                                                   (By arrangement with livemint.com)