Sensex, Nifty gain amid broad-based buying, but hot yields can trigger FII selloff

Benchmark indices Sensex and Nifty continued its winning streak for the second consecutive day as oil prices cooled off, signaling containment of Iran-Israel conflict. However, analysts expect the bearish bias to weigh markets in the near-term as elevated US bond yields can trigger foreign outflows.

The Sensex was up 560.29 points or 0.77 percent at 73,648.62, and the Nifty was up 189.40 points or 0.86 percent at 22,336.4. The market breadth was in favor of gainers as around 2,528 shares advanced, 1,235 shares declined, and 144 shares unchanged.

V K Vijayakumar, Chief Investment Strategist, Geojit Financial Services believes the market to be weighed by US bond yields that continues to hover around 4.6 percent. This can trigger further selling by foreign institutional investors (FIIs), he said.

At this time of uncertainity, 22,000-mark holds a major support for Nifty, said Sameet Chavan, Head Research, Technical and Derivative - Angel One. "On the higher end, 22,300 is the resistance for Nifty and an authoritative breakthrough of 22,430-22,500 can re-strengthen the bullish momentum," he added.

Meanwhile, broader markets outshone benchmark indices, with BSE Midcap and BSE Smallcap surging up to a percent on April 22. India VIX, which measures near-term volatility also reflected the bullish sentiment as it cooled off by 5 percent to 12.7.

All sectors participated in the rally. Nifty PSU Bank led the charge and gained over 3 percent, followed a percent gains in Nifty Auto, Nifty Pharma, and Nifty Infrastructure indices.

Stock-specific action will continue over the week as corporate earnings season progresses. Hence, market experts advise accumulating quality stocks until uncertainity is completely off the table.

On the global front, investors will watch out the Federal Reserve's preferred inflation data metric - Personal Consumption Expenditure due on April 26 to understand future trajectory of rate cuts.

Recently, the US Fed has expressed caution over inflation's 2 percent progress, pivoting their language to 'higher-for-longer' interest rates.

Apart from that, big tech firms such as Meta, Alphabet, Microsoft, and Tesla will also announce their quarterly results this week. This can impact both tech-heavy NASDAQ Composite and the S&P 500 indices trend.

Back home, market experts recommend a wait-and-watch investing strategy until geopolitical tensions in West Asia is completely over and India Inc's corporate earnings season are over.

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