Indian equity markets witnessed a significant surge on Monday, fueled by optimistic expectations for the upcoming interim budget on February 1 and a positive trend in other Asian markets, according to Manish Jain, Head of Fund Management at Centrum.
The Sensex concluded the day 1,240.90 points or 1.76% higher at 71,941.57, while the Nifty closed 385 points or 1.8% higher at 21,737.60. The rally was notably driven by private sector banks, with Domestic Institutional Investors (DIIs) continuing to show interest in value picking at current levels.
Jain noted that market volatility is likely to persist in the coming days as the results season unfolds. Additionally, the market will closely watch the upcoming US Federal Reserve meeting for any signals related to changes in the central bank's stance, inflation expectations, and potential rate cuts.
Vinod Nair, Head of Research at Geojit Financial Services, mentioned that the domestic market experienced an upturn due to recent selloffs and positive trends in Asian markets, providing an opportunity for investors to accumulate quality stocks. Despite premium valuations, investor confidence remains high, supported by optimism surrounding the interim budget and recent results aligning with forecasts.
Globally, the upcoming Federal Reserve policy is considered a crucial factor. While a rate cut by the Federal Open Market Committee (FOMC) is unlikely, investors are expected to closely monitor their commentary for insights into future rate paths.
Rupak De, Senior Technical Analyst at LKP Securities, highlighted that the Nifty has surged above key resistance levels, successfully reclaiming the 20-day moving average. The positive trend suggests potential upward movement, with the index poised to reach levels around 22,100-22,150 in the short term, while the support level is positioned at 21,550.
(With Agency Inputs)