Sensex rises for 3rd day, ends 345 pts higher; Nifty around 18,600

Indian equity markets closed higher for the third straight session on Monday amid positive global cues due to a weekend debt ceiling deal in the US. Buying was seen across all major sectors, barring IT and oil & gas stocks.

The 30-share BSE benchmark Sensex rose 345 points or 0.55% to settle at 62,846. The broader NSE Nifty surged 99 points or 0.54% to end at 18,598.

In the Sensex pack, M&M, Titan, and Tata Steel were the gainers, rising 2-3%. HDFC, UltraTech Cement, SBI, ITC, and IndusInd Bank also closed with gains. On the flip side, HCL Tech, Power Grid, Maruti, Wipro, TCS, and ICICI Bank closed with cuts.

Shares of ICICI Lombard closed 8% higher after ICICI Bank said that it will acquire an additional 4% shares in ICICI Lombard in multiple. tranches, whereas, RVNL shares closed in 5% upper circuit.

Sectorally, Nifty Consumer Durables advanced 1.29% and Nifty FMCG Metal rose 0.94%. Nifty Financial Services and Nifty Bank also closed higher. In the broader market, Nifty Midcap100 gained 0.38%, and Smallcap100 rose 0.30%.

Meanwhile, the market capitalisation of all listed companies on BSE surged by Rs 1.1 lakh crore to Rs 283.77 lakh crore.
The market breadth was skewed in the favour of the bulls. About 1,979 stocks gained, 1,652 declined, and 180 remained unchanged on the BSE.

Experts View
"The domestic benchmarks experienced a strong rally and came close to their lifetime highs, primarily driven by positive global cues and robust predictions of domestic economic growth," Vinod Nair, Head of Research at Geojit Financial Services, said.

"Meanwhile, the US PCE inflation rate that came in higher than anticipated raised the prospect of another rate hike by the Fed in its June meeting," Nair added.

Aditya Gaggar Director of Progressive Shares said, "Positive cues from the American markets regarding the US debt ceiling along with the FPI inflows hitting 6-month high boosted the markets sentiments. With the Auto and FMCG sectors trading at record levels while Bank Nifty registering a fresh high, the overall view for the markets remains bullish. Any positive development in the US economy will directly benefit the Indian IT industry."

Global Markets
European stock indexes slipped slightly on Monday, lacking momentum in thin trade while optimism about the US having reached a debt ceiling deal over the weekend kept Wall Street futures positive.

Asian stocks mostly rose, with Tokyo's Nikkei surging to a new 33-year high. But Chinese stocks fell after data showing profits slumping at China's industrial firms was the latest sign of an economic slowdown there.

European stock indexes initially opened higher, then faltered. Europe's STOXX 600 was flat on the day. But Wall Street futures rose, with S&P 500 e-minis up 0.3% and Nasdaq e-minis up 0.4%.

Crude oil
Oil prices were steady after US leaders reached a tentative debt ceiling deal, possibly averting a default in the world's largest economy and oil consumer, but concerns about further interest rate hikes capped gains. Brent crude futures climbed 14 cents, or 0.2%, to $77.09 a barrel, while US West Texas Intermediate crude was at $72.88 a barrel, up 21 cents, or 0.3%.

Rupee weakens
The Indian rupee weakened 0.07% versus the US dollar and quoted at 82.63 per dollar, tracking a fall in the Chinese yuan, while surging US yields pushed down rupee forward premiums.

Technical view
"During most part of the day the Nifty traded in a sideways manner and this is a consolidation after a sharp run-up which is a positive sign. The daily momentum indicator which was lagging has finally provided a bullish crossover which is now in sync with the price action. The daily Bollinger bands have begun to expand and with prices moving along the upper band suggests that the uptrend is likely to continue," Jatin Gedia, Technical Research Analyst at Sharekhan, said.

From a short-term perspective, we expect the Nifty to target levels of 18800. In terms of levels, 18700 – 18800 shall act as an immediate hurdle zone while the gap area formed today in the range 18500 – 18580 shall act as a crucial support zone from a short-term perspective, Gedia said.

(With inputs from agencies)