Indian benchmark indices extended gains for the second straight day as investors bought beaten down shares on hopes of a relief rally. The BSE Sensex surged 600 points to 53,830. The NSE Nifty 50 rose to reclaim 16,000-mark after almost a month. In the broader markets, the BSE MidCap gained 0.8% while the SmallCap index jumped 1.2%. The overall breadth was fairly positive with nearly three advancing stocks for every declining share. “Discussions on possible lowering of import duties on Chinese exports by the US, along with rumors of a multibillion-dollar stimulus by China are fuelling the global rally in equities. Falling commodity prices are also helping India’s cause,” said Nishit Master, Portfolio Manager, Axis Securities.
Traders can book part profits in this rally
Focus on asset allocation
Akhilesh Jat, Category Manager – Equity Research at CapitalVia said, “Major Indian Equity Indices continued the positive momentum for the second straight sessions. Benchmark index Nifty rallied over 1 per cent in morning trade and coming out of fortnightly consolidation ahead of India’s services PMI rose to 59.2 in June, from 58.9 in May. The June services PMI is the highest since April 2011. The fears of a global recession, tightening financial conditions and high inflation are the concern.”
According to Jat, the near-term market trend is weak and breakout correction below 15700 can drag-down to re-test the important support level of 15200. “It is recommended that investors continue with a disciplined approach, focus on asset allocation and look at equities from a medium to long term,” he said.
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