Sensex, Nifty extend gains on firm global cues; hunt on for next trigger

Equity benchmark the Sensex and the Nifty traded with gains on February 15, as global markets stabilised after investors digested hotter-than-expected US inflation print. Analysts expect the market to remain rangebound until participants find the next big trigger.

The Sensex and the Nifty were up 0.3 percent each at 72,050 and 21,910, respectively. Broader markets outperformed the benchmarks, as Nifty Midcap 100 and Smallcap 100 indices gained 1 percent each.

"The market is currently range-bound, with a wider range providing opportunities for non-directional options trading. Until this range is broken, new highs or significant lows are not expected to be created. Instead, the market is likely to remain volatile and choppy until a new trend is established," said Trivesh D, COO, Tradejini.

Over the past 8 sessions, Nifty has retraced only 61 percent of preceding seven sessions, highlighting a robust price structure. "This makes us confident to reiterate our positive stance and expect index to challenge the life highs of 22,124 in the coming month," said analysts at ICICI Securities.

Barring Nifty FMCG and Nifty Pharma indices, all other sectors swam in the sea of green. Nifty PSU Bank emerged as the best sectoral performer as it gained over 3 percent led by gains UCO Bank, Bank of India, Union Bank, and PNB.

What are the next big triggers for market? 

Market experts believe that volatility might increase as we head into the end of financial year, with investors eyeing to change their portfolio positions. Additionally, 2024 general elections and interest rate cut trajectory would also shape market movement.

"The upcoming election season could increase market volatility, which may result in higher option premiums. This could benefit expiry traders and positional option sellers. Also, which party wins will have a significant impact. It is expected that there will be a liquidity reduction in the market generally due to elections since a lot of political parties remove funds from the market for elections," said Trivesh D of Tradejini.

With the recent hot inflation print from US, traders have moved their bets on interest rate cuts to July from March and this will impact market momentum as well. According to CME-Fed Watch tool, prospects of rate cut in May rose to 36 percent from 32 percent a day ago.

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