Metal stocks drive surge in Sensex

The Sensex is up more than 400 points in trade on Monday, led by metal stocks. Sensex is currently trading at 74,053 points, up by 402 points with JSW Steel up more than 4% and Tata Steel up more than 3%. Chief Investment Strategist V K Vijayakumar stated that the market is bullish with momentum and signs of consolidation.

According to Vijayakumar, mutual funds are introducing restrictions on redemptions from small-caps schemes due to ‘frothy’ valuation concerns expressed by the regulator. This may result in higher flows of funds into large caps, specifically in automobiles, capital goods, financials, and select pharma sectors, which are expected to post good Q4 numbers.

The RBI monetary policy meeting scheduled for April 3 to 5 is likely to keep rates unchanged, therefore unlikely to impact the market. With Sensex showing positive momentum, investors are advised to monitor large caps and sectors expected to perform well in the coming days.

Overall, the market remains optimistic with positive indicators driving the Sensex up, while the focus shifts towards large caps as mutual funds introduce restrictions on small-caps schemes. The RBI monetary policy meeting is anticipated to maintain status quo on rates, further supporting the upward momentum in the market.