Nifty, Sensex rally for third session as experts flag caution

Indian equity markets extended their bullish run for the third consecutive session on Tuesday supported by continued buying sentimentThe Nifty 50 index opened on a positive note at 2434330 points gaining 12140 points or 05 per cent Similarly the BSE Sensex climbed 305 points marking an increase of 038 per cent to reach 8041547 points at the opening bellDespite the sustained rally market experts have highlighted the presence of selling pressure According to ANI the recent surge in Foreign Institutional Investorsrsquo FIIs purchases amounting to Rs 9947 crore on Monday was linked to MSCI rebalancing which included an increased weightage for HDFC Bank Conversely Domestic Institutional Investors DIIs sold equities worth Rs 6907 crore on the same dayExplaining the dynamics V K Vijayakumar Chief Investment Strategist at Geojit Financial Services said The twoday rally in the market is unlikely to sustain beyond a point since earnings concerns are major headwinds The impact of short covering and the Maharashtra election results will be temporary He also noted Too much should not be read into FIIs turning big buyers yesterday as this was largely due to MSCI rebalancing Leading banks will remain resilient due to consistent buying and reasonable valuations Moving forward global cues such as developments from President Trump will influence sentimentMSCI rebalancing a periodic adjustment process to add or remove stocks from MSCI indices aims to maintain their reliability as market benchmarksSectoral indices also reflected strong performance with Nifty Financial Services leading the pack gaining 071 per cent Nifty Bank and Nifty Auto followed with modest gainsOut of the Nifty 50 stocks 37 opened in the green six registered declines while seven remained unchanged Top gainers included Bharti Airtel Infosys ITC BEL and Hindustan Unilever Conversely ONGC Adani Ports NTPC Ultratech Cement and LampT were the top laggardsAkshay Chinchalkar Head of Research at Axis Securities commented on the technical outlook The Nifty rose 13 per cent yesterday marking the second consecutive session with over a 1 per cent gain a streak last witnessed in December The gapup move means 23956 becomes a critical support level while 2434024530 is a key resistance zone Beyond this the 50day and 100day averages around 2470024800 represent the next hurdlesIn the broader Asian markets indices showed mixed trends Japans Nikkei 225 fell by 13 per cent Taiwans Weighted Index declined by 079 per cent and South Koreas KOSPI dropped by 055 per cent However Hong Kongs Hang Seng Index registered a marginal gain of 037 per cent during the day according to ANI reportsWhile Indian indices remain buoyant for now market participants are closely watching for further cues on global economic developments and earnings trendsWith inputs from ANI