The stock market has been on a roller coaster ride since the pandemic started in 2020. It has seen many ups and downs in recent times. And is still crossing new benchmarks. The market started off on a strong note with the BSE Sensex reclaiming the 60,000 mark and the Nifty50 closing above the psychological 18,000-mark, on January 10 amid a mixed trend in global markets.
Here we bring you four factors that lead the market higher:
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Earnings Season
At present, the market seems to be hoping for yet another strong earnings season. In the current week, the December 2021 quarter earnings season will kick-off. Analysts are expecting double-digit growth in earnings, though it could be driven by a few sectors and not broad-based due to expected margin pressure.
“Overall the earnings are expected to keep up the pace and be robust, which would ease the valuation worries that the Indian market is witnessing,” explained Sonam Srivastava, founder of Wright Research.
Banks On Buyers’ Radar
After provisional numbers published by several banks strengthened sentiment further, there are expectations of strong earnings growth, especially last week.
Today Federal Bank, PNB, RBL Bank, SBI, Kotak Mahindra Bank, ICICI Bank, IDFC First Bank, Axis Bank, Bandhan Bank, and AU Small Finance Bank gained 1-4 percent, lifting the Nifty Bank to over 1.5 percent.
“Green shoots have appeared, with 10 out of 13 banks reporting double-digit loan growth as per the Q3FY22 business update. Earnings momentum from Q2FY22 is expected to continue in Q3FY22, with banks reporting better topline as a result of the improved collection and solid loan growth,” explained Yesha Shah, Head of Equity Research, Samco Securities.
Realty Stocks Also Gain Momentum
Rally in real estate stocks is being driven by initial sales numbers disclosed by real estate companies which are quite strong and healthy. The Nifty Realty index climbed 10 percent in the last three weeks, or especially since December 20.
Today the index gained nearly 2 percent as Sunteck Realty was the biggest gainer amongst them, up over 11 percent after pre-sales increased 29 percent sequentially and collections jumped 30 percent QoQ in December 2021 quarter.
Among others, Brigade Enterprises, Oberoi Realty, DLF, Godrej Properties, and Indiabulls Real Estate gained 1.5-3 percent, while Sobha and Prestige Estates ended with moderate gains today.
Technical View
In the last week, we witnessed bullish candle formation. Following the same trend today, the Nifty50 formed a bullish candlestick pattern on the daily charts. Experts are of the opinion that if the index manages to hold the 18,000 mark in the coming days, then 18,200-18,300 would be the next resistance.