Nifty extends rally

Indian equity benchmarks were consistently trading higher ahead of F&O expiry tomorrow, supported by foreign money. Foreign institutional investors had bought more than Rs 4,000 crore worth of shares in last four days. Even the volume has been increasing.

The 50-share NSE Nifty was facing resistance at 5600-mark, which gained 61 points to 5,606. The 30-share BSE Sensex was trading at 18,710, up 218 points though there was profit booking at higher levels.

Sensex surges

The NSE Nifty continued to hover around its psychological 5600 mark. All sectoral indices were trading in green. The BSE FMCG index has outperformed other sectoral indices, rising over 2%. Metals, power, IT  and banking stocks too have surged.

The BSE broader indices - midcap and smallcap were up by nearly 1% each.

Ambareesh Baliga, COO, Way2Wealth says the pullback is due to short covering. “The current rally may not be sustainable."

He further says because of futures and options expiry tomorrow theNifty may go towards 5,600-5,650. But he doesn’t see the index moving beyond 5,600-5,650. There will a dip in the market and people should use that dip to buy. He reiterates his prediction of a bull run post August-September."

Sensex gains.............

The benchmark Sensex was moderately up in the opening trade on Tuesday, supported by banking, capital goods, power, Anil Dhirubhai Ambani Group and select metal companies' shares. TheNifty was hovering around the 5500 level.

Sensex gains 150 points

Indian equity benchmarks were consistently holding the upside momentum, led by oil & gas, PSU, banking, metal and capital goods companies' shares - especially after fall in crude oil prices as well as hike in petroleum products prices.

The 50-share NSE Nifty was trading at 5,525, up 54 points and the 30-share BSE Sensex jumped 163 points to 18,403.

Oil price hike is bad news for banks

The unintended consequence of the UPA government not raising oil prices till recently was that banks got to lend more money to the oil companies.

A close look at the latest figures put out by the Reserve Bank of India (RBI) shows that credit growth was largely due to borrowing by the oil marketing companies (OMCs).  If this borrowing comes down, credit growth can even become negative.