Dalal Street Corner: Easing commodity prices, buying interest in IT, Metal help market extend gains; what should investors do on Tuesday?

The Indian stock market extended gains for the third consecutive day amid positive gobal cues on Monday. During the last three sessions, benchmark Nifty50 gained 2.7% amid relief rally.  

The rally was led by easing commodity prices and buying interest in IT and metal stocks. HCL Tech, Tech Mahindra Infosys led the IT pack as the Nifty IT index gained over one per cent, followed by Nifty Metal, which settled with more one and half per cent gains.  

The contribution also came from the broader market, in which Nifty midcap gained one per cent and Nifty small cap ended higher by two per cent.  

Tracking their Asian peers, the Indian markets ended nearly one per cent higher. The broader Nifty50 and the Sensex gained 0.85% and 0.82% as they settled 15,832 and 53,161.  

Foreign institutional investors (FIIs) remained net sellers in the capital market, as they sold shares worth Rs 2,353.77 crore on Friday, showed exchange data. 

Experts suggest investors to remain cautious amid rising inflation and rate tightening by central banks across the world.  

As the market rallied to end in the green for the third straight session, here is what experts make of Monday's trading session:  

Vinod Nair, Head of Research at Geojit Financial Services. 

Declining commodity prices have been lifting the exhausted domestic equity market during recent sessions. Despite this positivity, the underlying fear of recession, tightening monetary policy and inflation can trigger volatility going forward. A strong revival in the market can only be expected when the economy stabilises from these uncertainties and when FIIs turn net buyers. 

Ajit Mishra, VP - Research, Religare Broking Ltd 

We feel global cues will continue to dictate the trend. Besides, domestic factors like the upcoming GST council meet will also be in focus. We reiterate our positive yet cautious view on markets, citing the hurdle at 15900 levels. A decisive breakout could further fuel the recovery to the 16200 zone in Nifty, else correction would resume. Amid all, we’ve been seeing select sectors/themes doing well so the focus should be more on identifying the stocks from such themes while keeping a check on leveraged positions. 

Gaurav Ratnaparkhi, Head of Technical Research, Sharekhan by BNP Paribas 

The Nifty, with a gap up opening, crossed the hurdle zone of 15700-15800. The index, however, couldn’t build upon the early gains and was in a consolidation mode post the positive start. Going ahead, the index can witness a brief consolidation near 15700-15800 before stretching higher.  

On the higher side, Nifty is expected to test the crucial psychological mark of 16000, where there is 20 DMA as well. Overall structure shows that the benchmark index can trade sideways to bullish bias in the short term. 

Shrikant Chouhan, head of equity research (retail) at Kotak Securities 

While the change in mood has come as a major relief, the optimism may remain for a few more sessions before the market turns volatile amid concerns over the slowing global economy due to rate hikes and continuing foreign fund outflows.  

(Disclaimer: The views/suggestions/advice expressed here in this article are solely by investment experts. Zee Business suggests its readers to consult with their investment advisers before making any financial decision.)