Stock Market Update: As the dollar weakened to a three-year low and crude oil corrected sharply, the Indian stock market witnessed a strong buying trend on Monday, April 21, with Sensex skyrocketing over the 79,600 mark. Nifty 50, also, neared its 24,200 level. The performance was strongly driven by banking and IT stocks. HDFC Bank and ICICI Bank reported strong gains that made investors optimistic of positive Q4 in other banks, while IT stocks led the bulls after robust buying in Tata Elxsi, Coforge, and tier-2 companies.
Sensex, Nifty:
At the time of writing, Sensex traded at 79,417.09, higher by 863.89 points or 1.10%. While Nifty 50 performed at 24,125.65, higher by 266.20 points or 1.12%.
In the early trade of Monday, April 21, Sensex skyrocketed by a whopping 1,081.85 points to hit an intraday high of 79,635.05. Also, Nifty climbed by 337.9 points to hit an intraday high of 24,189.55.
Broad-based buying was recorded across indices, with 1% to 4% gains. Further, Midcap and Smallcap indexes also advanced by more than 2%, adding to the bullish trend.
1. Bank Nifty Hits New All-Time High
Bank Nifty touched a new all-time high of 55,461.65, after strong gains in Q4 of HDFC Bank and ICICI Bank. All banking stocks skyrocketed, with AU Small Finance Bank, IDFC First Bank, IndusInd Bank and Axis Bank rallying by 4% to 6%. Stocks like Federal Bank, Kotak Bank, SBI, Canara Bank, Bank of Baroda and PNB surged by 2.5% to 3%. HDFC Bank and ICICI Bank zoomed between 1-1.5%.
2. IT Stocks Strong Buying:
Nifty IT index skyrocketed by nearly 3.5% to hit an intraday high of 34,528.55. Stocks like Mphasis, Tech Mahindra and Coforge zoomed by 4% to 6%. While HCL Tech, Infosys, and LTIMindtree gained by 3% to 3.5%. Furthermore, stocks like Persistent, Wipro and TCS shares climbed by 1% to 2%.
The performance comes despite the Q4 miss by Infosys and Tata Elxsi's Q4 results.
3. Metals and Oil & Gas Stocks Rally Too:
The Nifty Metal and Nifty Oil & Gas indices were also among the top contributors, with an upside of nearly 2.5% each and intraday highs of 8,674.00 and 10,947.80, respectively. Stocks like GAIL, Petronet LNG, Oil India, Indian Oil, MGL, and ONGC zoomed by 3% to 4.5%. In the metal segment, stocks like Hindustan Copper, NALCO, Hindustan Zinc, JSPL and JSW Steel advanced by 3% to 4.5%.
4. Dollar, Crude Oil Dropped:
Equities became attractive as investors dumped dollar and Brent crude. The US dollar index touched its lowest level since February 2022, to 98.2 on Monday. The dollar became weak after panic arose over the Federal Reserve's independence.
Trading Economics data highlighted that National Economic Council Director Kevin Hassett revealed that President Trump is exploring the possibility of firing Fed Chair Jerome Powell. A day earlier, Trump posted on social media that Powell's removal "cannot come fast enough," while intensifying pressure on the central bank to cut interest rates.
Furthermore, Brent crude plunged by over 1% to hit $67 per barrel, after nuclear negotiation talks eased between US and Iran. Iran's foreign minister reportedly said that both Iran and the US have agreed to put in place a framework that could lead to a possible nuclear deal.
5. Global Trends:
As per Dr VK Vijayakumar, Chief Investment Strategist, Geojit Investments Limited, Even though the global economic scenario is mired in uncertainty, India appears relatively resilient. India is the only large economy which can grow at 6% even in a slowing global economy. This, along with the declining dollar, has the potential to attract more FPI inflows into India in the short run.
He added, the focus of the FIIs will be the domestic consumption themes like financials, telecom, aviation, hotels, select autos, real estate, cement and health care. Growth stocks in the digital space also have the potential to move up. IT will continue to be under pressure since the growth outlook for the sector is bleak due to the expected sharp slowdown in the US economy.
"The possibility of India striking a deal with the US in the next few months is being perceived by the market as positive. Viewed from the perspective of the short-term market construct it is Advantage India," Vijayakumar said.
Next Target For Sensex, Nifty,
Shrikant Chouhan, Head Equity Research, Kotak Securities said, On the weekly chart, a bullish candle has been formed, and the market is maintaining an uptrend continuation formation on both daily and weekly charts by closing above the level of 23800/78500 We believe the short-term market texture is bullish; however, we may see range-bound activity in the near future due to overbought conditions. For traders, the levels of 23500/77400 would act as key support zones, while resistance zones for the bulls can be found between 24000/79000 and 24200/79600. However, if the market moves below 23500/77400, the sentiment could change, and the market may fall to 23350/76900 or 23200/76500, where the market has left a bullish gap. As for the Bank Nifty, it rallied over 6 per cent last week and also formed a long bullish candle on the weekly chart, which is broadly positive. For trend-following traders, the crucial support levels would be 53,500 and 53,100. As long as these levels hold, the uptrend is likely to continue. On the higher side, the index can test 54,500-55,000 and further rise to 55,300.
On the technical front, Choice Broking said, the Nifty has shown a strong bullish reversal from the demand zone near 21,743.65 on the daily chart, registering a sharp 9.62% upmove. The index successfully closed above the 22,850 level, confirming bullish momentum. If the price sustains above this level, we can expect a continuation of the uptrend, with potential upside targets placed at 24,500 and 25,000. On the downside, immediate support lies at 23,600 and 23,400, and any dip towards these levels is likely to be seen as a buying opportunity.
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