Sensex, Nifty extend rally for second day on global cheer, FII inflows

Indian benchmarks rallied for a second day on Friday, as domestic indices snapped two sessions of losses to rise further on the back of renewed hopes for global equities after easing geopolitical tensions and fresh foreign institutional inflows boosted investors’ sentiment. After opening higher, both Sensex and Nifty advanced further and traded close to record levels.

“We have seen another day of broad strength as concerns around geopolitical tensions start to ease significantly following signs that the US and Iran want to avoid war, while Israel and Lebanon have announced a 10-day ceasefire,” said a market analyst.

Expectations of a US-Iranian diplomatic solution and the announcement of a 10-day truce between Israel and Lebanon have provided a strong boost to global risk sentiment, the analyst added.

The benchmark BSE Sensex rose 504.86 points or 0.65 per cent to close at 78,493.54. Intra-day, it climbed 564.77 points or 0.72 per cent to 78,553.45. The broader NSE Nifty advanced 156.80 points or 0.65 per cent to finish at 24,353.55.

During the week, the benchmark indices continued their positive momentum. The Nifty ended 1.30 per cent higher, while the Sensex was up by 944 points. Among sectors, almost all the major sectoral indices showed buying interest from the lower levels, but the Capital Market and Defence indices outperformed, with the Capital Market rallying 6.95 per cent and Defence gaining 6.12 per cent.

After a gap-down open, the market took support near 23,500/75800 and reversed sharply. Post-reversal, it held positive momentum throughout the week. Technically, on weekly charts, it has formed a bullish candle, and on daily charts, it is holding a higher bottom formation, which is largely positive.

In addition, the market is currently trading comfortably above short-term averages, which also supports a further uptrend from the current levels.

“We are of the view that the short-term market texture is bullish, but a buy on dips and sell on rallies strategy would be suitable for traders. On the downside, 24,000/77500 and 23,800/77000 would act as key support zones, while 24,700/79500 and 24,800/79800 could be the key resistance areas for the bulls. However, below 23,800/77000, sentiment could change, and the index may retest the level of 23,550-23,500/76000-75800,” says Amol Athawale, VP Technical Research, Kotak Securities.

For Bank Nifty, as long as it is trading above 55,500, an uptrend is likely to continue. On the higher side, it could move up to the 200-day SMA (Simple Moving Average), around 57,300. Further upside may also continue, potentially lifting the index to 57,800-58000.