Stock indices surge as Sensex-Nifty start trading week on positive note
May 06, 2024
Mumbai (Maharashtra) [India], May 6 : Stock indices, Sensex and Nifty, kicked off the trading week with a surge, buoyed by positive global cues.
Sensex gained 178.02 points, opening at 74,064.96, while Nifty rose by 49.35 points, starting the day at 22,523.30.
Among the Nifty companies, 31 advanced while 19 declined in the opening session. Leading the gains were Britannia, Kotak Bank, JSW Steel, Maruti, and TCS, whereas Titan, SBI, Shri Ram Finance Limited, Adani Ports, and Adani Enterprises faced losses.
Varun Aggarwal, founder and managing director, Profit Idea, said, "The positive momentum in the Indian markets mirrors the trend in Asian equities, which as expected opened strong on Monday. This optimism stems from China's return from holiday and a softer-than-expected US jobs report, which has revived hopes for Federal Reserve rate cuts. US stock futures edged higher, with contracts in Australia and Hong Kong pointing to gains."
Global stocks had a buoyant week previously, with US Treasuries rallying on Friday. Australian and New Zealand bonds also rose, driven by weaker-than-estimated data points that sent the US Economic Surprise Index to its lowest since February 2023.
However, technical indicators for Nifty 50 signal caution. The index formed a bearish engulfing pattern on the daily chart, suggesting potential weakness ahead. The weekly chart indicates a gravestone doji pattern, hinting at a possible reversal.
The short-term trend has shifted downward, with immediate resistance at 22,600 and next downside levels at 22,120.
Traders will keep a close eye on central bank meetings scheduled for this week, including the Reserve Bank of Australia, expected to adopt a hawkish stance.
Additionally, Chinese activity data and inflation readings in key emerging markets will be closely watched.
Oil prices saw an uptick after Israel closed the Kerem Shalom humanitarian crossing into Gaza, and Saudi Arabia lifted crude prices to Asia to tighten the oil market.
The positive start for Sensex and Nifty reflects broader optimism in global markets, driven by favorable economic indicators and central bank policies.
However, technical patterns suggest potential challenges ahead, urging investors to remain cautious amid uncertainties.
