Domestic equity benchmarks Nifty 50 and Sensex extended a three-session winning streak in early trade on April 21, despite muted global cues, amid a strong jump in banking stocks. The Nifty 50 index managed to reclaim the 24,000 level during the opening deals.

At 09:16 am, the Sensex was up 538.63 points or 0.69 percent at 79,091.83, and the Nifty was up 141.80 points or 0.59 percent at 23,993.45. About 1749 shares advanced, 718 shares declined, and 213 shares remained unchanged.

The top contributors to the gains on the Nifty 50 index were Axis Bank, ICICI Bank, and SBI.

The broader markets traded with gains as well, with the Nifty Midcap 100 and Nifty Smallcap 100 indices gaining around half a percent each.

Banking stocks extended their sharp outperformance. Expectations of more rate cuts from the RBI after benign inflation data, along with improved NIM outlook as banks lowered savings rates, stable asset quality, and attractive valuations, are the key triggers behind the rally in banking stocks.

Further, positive results from index heavyweights HDFC Bank and ICICI Bank spurred the Bank Nifty index to fresh highs in trade. The index topped the 55,000 mark for the first time, to clock a record high of 55,025.95.

The sectoral indices presented a mixed trend. While banking stocks hogged the limelight, the Nifty IT index also posted strong gains. On the flip side, FMCG, media, and auto stocks saw mild selling pressure at open.

While volatility may linger due to ongoing tariff uncertainties, India's strong economic fundamentals, easing inflation, and upbeat Q4FY25 expectations keep the outlook positive, noted Prashanth Tapse, Senior VP (Research), Mehta Equities.

Foreign investors buy

Over the past week, foreign portfolio investors have infused nearly Rs 8,500 crore in the country's equity markets, after a phase of heavy outflows earlier in the month, supported by renewed investor confidence, resilient domestic economy, and relative insulation from global trade disruptions.

"The focus of the FIIs will be the domestic consumption themes like financials, telecom, aviation, hotels, select autos, real estate, cement, and health care," said VK Vijayakumar, Chief Investment Strategist, Geojit Investments.

"Even though the global economic scenario is mired in uncertainty, India appears relatively resilient. India is the only large economy that can grow at 6 percent even in a slowing global economy. This, along with the declining dollar, has the potential to attract more FPI inflows into India in the short run," he added.

Muted global sentiment

On April 17, the broad-based S&P 500 eked out minor gains to settle higher by 0.13 percent, while the Nasdaq Composite slipped 0.13 percent. However, the Dow Jones index surged 1.3 percent in trade. Wall Street was closed for trade on April 18 as a result of the Good Friday holiday.

On early Monday morning, Dow futures were trading around 300 points lower, indicating a weak investor sentiment, while S&P 500 and Nasdaq futures ticked 35 and 110 points lower, respectively.

Asia-Pacific markets opened mixed on early Monday morning as investors awaited China’s rate decision at a time when the yuan has come under pressure due to Beijing-Washington trade tensions.

Japan’s benchmark Nikkei 225 fell over one percent, while the broader Topix index lost 0.9 percent. In South Korea, the Kospi index increased 0.22 percent at the open while the small-cap Kosdaq was flat. China-based Shanghai Composite was higher by 0.4 percent.

Technical levels

"The next significant resistance level for the Nifty is 24,050, which represents the 50 percent retracement level of the entire decline from the peak of 26,277 to the recent swing low of 21,743. The support level for the index has now shifted upwards to 23,500," said HDFC Securities’ Devarsh Vakil, Head of Prime Research.

Open Interest (OI) data reveals heavy call writing at the 24,000 and 24,100 levels, suggesting strong resistance. On the other hand, robust put writing at 23,500 reflects a strong support base.

Strategy for investors, traders?

Market experts suggest that traders should remain cautious. "Overall, while the bulls seem to hold the current momentum, intraday volatility and profit booking near resistance zones remain likely. Traders are advised to remain cautious near upper resistance levels and consider buying on dips toward key support zones," said Mandar Bhojane, Research Analyst, Choice Broking.