Amidst dissenting macro-economic conditions and acute investor pessimism, equity benchmarks extended their winning streak to the fifth consecutive session on Monday. While analysts attribute the change in market wave to cooling-off of crude prices, correction in commodity prices and strengthening of monsoon across the country, there are fears that the ongoing upswing may have run its course for now. Led by interest-sensitive sectors — realty and banking — the 30-share Sensex ended 336 points or 2.2% higher at 15,503.92 on Monday. The 50-share Nifty closed 90 points or 2% higher at 4,620.4, holding on to gains made earlier in the day.

Lingering macro-economic concerns and the worsening credit squeeze globally is likely to offset the cheer emanating from the recent decline in crude oil prices, say brokers. Crude is currently trading at $117 a barrel on the New York Mercantile Exchange, having come within sniffing distance of the $150 per barrel mark a few weeks ago. “Sentiment has turned positive, but macro head winds persist. We expect the market to move in a very narrow range — say 10% up or down — with heavy resistance on the upside,” said Sharekhan research head Gaurav Dua. As per provisional figures on NSE, foreign portfolio investors bought shares worth Rs 280 crore on Monday, while domestic institutions mopped up Rs 505 worth of shares at the net level.

Jaiprakash Associates, Reliance Infrastructure, ICICI Bank, SBI and DLF were among the gainers of the day while investors sold defensive IT scrips like Infosys and TCS in good numbers. Sterlite Industries and Tata Steel were also among the laggards of the day. The market is expecting some respite in monetary tightening initiatives adopted by RBI in the wake of falling crude prices and moderating inflationary pressures. Investors are sceptical of another round of interest rate hikes by the central bank, opine brokers.

“The rally in interest-sensitive sectors clearly shows that investors are not expecting stringent measures to curb inflation. From what we understand, the market will move in a range, and volatility will continue. It is time for retail investors to book some profits,” said Religare Securities’ head of institutional business Sangeeta Purushottam. Even if the market discounts monetary tightening measures ahead, it will have to counter moderation in economic growth and risk to corporate earnings in the months to come.

“We expect the situation to improve from the third quarter onwards as the base effect shall turn positive for inflation as well as industrial production by then,” said Mr Dua, adding, “the effect of recent monetary tightening measures — in terms of moderation of credit growth and slackening of aggregate demand — too would have played out by that time,” he added. Asian stocks gained, led by banks and automakers, as the five-week slump in commodity prices eased inflation concerns and boosted earnings prospects.

While Hong Kong’s Hang Seng ended 0.1% lower at 21,859, Japan’s Nikkei, Singapore Strait Times and Seoul Composite ended higher in range of 0.6% and 2%. Of 2776 shares traded on BSE, 1,738 scrips advanced, 1,667 declined and 68 remained unchanged