Cutting down of bearish bets by foreign portfolio investors (FPIs) has spurred a sharp rally in India’s key equity indices. The Sensex and Nifty rallied for the fifth consecutive trading session on Thursday.

Experts are of the view that the pullback can continue for a few weeks as corporate earnings top expectations. Sensex gained 284 points or 0.51 per cent to close at 55,681. The Nifty rose 84 points or 0.51 per cent to close at 16,605.

In the cash segment, the FPIs made net purchases of stocks worth ₹1,800 crore on Thursday. The data for FPI activity in the derivatives segment for the day was not published by the exchanges till the time of going to press but the trend shows they have been buyers in the segment for the current month.

“The short term trend of Nifty remains up. The next upside resistance (for Nifty) is around 16,800 levels. Immediate support is placed at 16,480 levels,” said Nagaraj Shetti, Technical Research Analyst, HDFC Securities.

The market is unlikely to see a major crash in the near future unless there is a sudden spike in global oil and gas prices, which have been driving sentiments for the past several weeks, analysts say. Further, all eyes will be on the US Federal Reserve meeting on interest rate that will be held around the end of the month. The Fed is expected to restrain itself to just another 25 or 50 basis points rate hike since the runaway rally in oil and gas prices have cooled down. Markets are expecting the global financial system to slip into a recession following the aggressive rate hikes by central banks and the roll back of stimulus packages.

In India, results season will be in focus since index heavyweights such as Reliance, Ultratech, JSW Steel, Infosys, ICICI Bank, Kotak Bank would be reporting their quarterly results in the next couple of days.

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