Indian markets made a strong recovery on Monday after three consecutive sessions of selling, with the Nifty and Sensex both posting significant gains. Analysts suggest a year-end rally is still possible if key economic conditions improve.
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After facing consecutive selling pressure over the past three trading sessions, Indian markets rebounded on Monday, with both the Nifty 50 and BSE Sensex indices marking significant gains.
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The Nifty 50 surged 150 points, or 0.64 percent, opening at 23,738.20 points, while the Sensex gained over 448 points to open at 78,490.19 points. Analysts observed that for this recovery to turn into a sustained rally, progress on inflation, further interest rate cuts, and a reduction in market volatility caused by global events—such as uncertainties surrounding former US President Donald Trump's political movements—are necessary. Nonetheless, the possibility of a year-end rally still remains.
Ajay Bagga, a banking and market expert, stated, "The US rally on Friday is supporting Asian equities this morning. Short-term momentum is turning positive again, and we may see a year-end rally in the remaining seven working days of 2024. However, the broader trend remains challenging due to persistently high US bond yields."
Sector-wise, the Nifty Metal index emerged as the top gainer among the NSE sectoral indices, with Nifty IT, Nifty Media, Nifty FMCG, and Nifty Pharma also seeing positive movements. As per ANI, the Nifty 50 witnessed 46 stocks advancing, while two stocks saw a decline, and two remained unchanged. JSW Steel, Hindalco, Shriram Finance, Trent, and HDFC Bank were among the top gainers, while the major losers included SBI Life, HDFC Life, Power Grid, and BEL.
According to Akshay Chinchalkar, Head of Research at Axis Securities, "Support for the Nifty lies at 23,400, which was the target of the short-term head and shoulders pattern confirmed on 18th December. Below this level, the final support for the bulls would be at the November 21 low of 23,263. The three-day momentum is at a low, suggesting the likelihood of a rebound remains high."
Asian markets also saw positive movements on Monday. The Nikkei 225 index climbed 0.88 percent, Taiwan's Weighted Index rallied by 2.55 percent, South Korea's KOSPI surged 1.57 percent, Hong Kong's Hang Seng gained 0.36 percent, and Indonesia's Jakarta Composite rose by 1.22 percent.
The Nifty 50 had experienced a sharp 4.77 percent decline last week, marking its largest weekly drop of the year. The index had fallen from the 24,800 level, which now acts as strong resistance. According to Sunil Gurjar, SEBI Registered Research Analyst and Founder of Alphamojo Financial Services, "23,300 serves as a critical support level. A breakdown below this level would suggest a continuation of the downtrend."
While Monday's recovery has raised hopes, market experts continue to monitor global economic conditions and domestic factors that will play a pivotal role in determining the trajectory of Indian equities
(With inputs from ANI)
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