Sensex rises over 150 points, Nifty above 23,900 as investors weigh Iran tensions, weak monsoon concerns

· The Economic Times

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Analysts suggest adjusting portfolios towards fixed income and monsoon-proof sectors like healthcare and defense to mitigate potential fallout from the dry spell.

The Indian stock market edged higher on Wednesday, with Sensex and Nifty trading in the green after two days of losses, amid underlying concerns around further escalation in the US-Iran conflict and weaker-than-expected monsoons.

Sensex rose over 150 points, while Nifty 50 above 23,900 on during Wednesday's trading session. Broader markets extended gains, with Nifty Smallcap 100 and Nifty Midcap 100 indices rising around 0.2% each.

Kotak Mahindra Bank, Adani Ports and Titan shares gained more than 1% each to lead gains on Sensex, while those of Mahindra & Mahindra (M&M), TCS and Trent rose nearly 1% each to follow. Bucking the trend, Bajaj Finserv and HDFC Bank shares declined nearly 1% each at open. This came as India VIX, which measures volatility in market, inched lower at 13.60.

Sectorally, Nifty Consumer Durables and Nifty Realty gained nearly 1% to lead gains, while Nifty Nifty Metal slipped into the red. Around 1,678 stocks advanced on NSE, while 581 declined and 134 remained unchanged.

Middle East tensions simmer

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Iran on Tuesday said that it would not meet the senior US envoys who have travelled to the region after the outbreak of hostilities, increasing worries around how long peace would last between the two countries.

As a result, oil prices inched higher. Brent crude futures rose above $73 per barrel, while those of WTI Crude were trading close to $70 per barrel on Tuesday morning.

Poor monsoon weighing on Dalal Street

VK Vijayakumar, Chief Investment Strategist at Geojit Investments, noted that a major concern weighing on the market now is the poor monsoon which so far has been worse than expected. June has ended with a 40% rain deficit and for July, the IMD has predicted below normal rainfall. If this trend continues the actual rainfall this monsoon season may fall below the IMD’s forecast of 90% of long-term average, according to the analyst, who added that the market has not yet discounted this negative trend.

“Investors may fine tune portfolios to discount the potential negative fallout of poor monsoon. Partial portfolio adjustment in favour of fixed income may be considered. Also churning of portfolios in favour of monsoon-proof sectors like health care, pharmaceuticals, power and select fairly valued defence stocks is advisable,” according to Vijayakumar.

Technical view on Nifty

On the upside, Nifty continues to face resistance around its 100-DMA at 24,130, and a decisive close above this level would confirm a meaningful breakout, said Nilesh Jain, VP- Head of Technical and Derivative research at Centrum Finverse. He added that momentum indicators continue to support the positive bias, with the MACD maintaining a buy crossover above the zero line and the RSI holding above the 50 mark, indicating sustained bullish momentum.

“The broader technical structure remains constructive, and the buy on dips strategy remains intact as long as the index sustains above its short-term 21-DMA, placed at 23,690,” he said.

(With inputs from agencies)
(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of The Economic Times)

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