Banking stocks propel Nifty to fresh record high; Q4 results to shape market momentum

Banking stocks helped benchmark index Nifty to hit fresh record high of 22,775 on April 10, while Sensex gained 0.4 percent. With markets witnessing bull run day after day, equity strategists forecast consolidation in the next few days. All eyes will be on the US inflation print and India Inc's corporate earnings season as they will shape market direction.

On April 10, the Sensex was up 354.45 points or 0.47 percent at 75,038.15, and the Nifty was up 92.20 points or 0.41 percent at 22,735. The market breadth was in favour of gainers as around 1,707 shares advanced, 1,564 shares declined, and 86 shares were unchanged.

Analysts at ICICI Securities suggested that any temporary breather before Q4 results season should be utilised by investors to buy. "We believe Nifty is on course to march towards 23,200-mark by the end of 2024 general election outcome, with a strong support placed around 22,300," they added.

All eyes will be on the US inflation report due later today. Apart from that, investors will also track minutes of the March Federal Reserve meeting to understand the rate cut path.

"Following the release of strong US job data, market sentiments are inclined towards an anticipation of spike inflation, thereby reducing the likelihood of a near-term rate cut," predicts Vinod Nair, Head of Research, Geojit Financial Services.

According to CME-FedWatch tool, the US rate futures market has priced in a 46.1 percent chance of a rate cut in June, down from 50.8 percent as day ago.

The Street estimates that the US inflation may rise to 3.4 percent in March from 3.2 percent in February, underscoring Fed's 2 percent inflation goal.

Apart from that, back home, India Inc will begin its corporate earnings season from April 12 onwards, which is likely to give flavour to this ongoing bull run. IT behemoth TCS will kick off earnings season on April 12, followed by Bajaj Auto, HDFC Life, and Infosys on April 18.

On April 10, broader markets outperformed benchmarks as BSE Midcap and BSE Smallcap surged up to 0.9 percent. India VIX, which measures near-term volatility cooled off by 2 percent to trade around 11.11.

Sectorally, Nifty PSU Bank was the best performer of the day led by State Bank of India. Bank Nifty, too, sailed above 49,000-mark for the first time ever driven by gains in private lenders such as ICICI Bank, Axis Bank, and Kotak Mahindra Bank.

Additionally, firming up of commodities brought sheen to the metals pack. Nifty Metal index rose over a percent led by Coal India, Hindustan Zinc, and JSW Steel.

In this bull run, the losers stood out to be auto and pharma stocks.

Going ahead, Rupak De, Senior Technical Analyst, LKP Securities predicted that Nifty's decisive move above 22,750 might induce a rally towards 23,000 in the short-term. Hence, he suggested investors to adopt a buy-on-dip and sell-on-rise investing strategy.

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