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Global markets are rallying in anticipation of aggressive US Fed rate cuts in 2024, and Indian equities too are experiencing a surge despite premium valuations driven by reversed FIIs inflows amid global risk-on, Vinod Nair, Head of Research at Geojit Financial Services, said on Tuesday.

However, some exhaustion is noticed in mid and smallcaps after the stretched rally of last two months.

The year 2024 is forecast to be a sector rotation period. Sectors like consumption, IT, pharma and export-based stocks should do better, Nair said.

Siddhartha Khemka, Head of Retail Research at Motilal Oswal Financial Services, said the Nifty opened positive and traded sideways to close with gains of 92 points at 21,441 levels. Majority of the sectors ended in green with buying seen in oil & gas, metals, pharma and auto.

Fresh buying was seen in chemical sector stocks. Volatility index, India VIX surged by 7 per cent to 14.65, he said.

“Hopes of rate cuts in early 2024 and conflict in the Red Sea have led to rebound in crude oil prices. We expect markets to be in a range with positive bias and end the year on a positive note. There is lack of significant triggers and in the absence of any major events due to the holiday season. Stock specific movement and series of new listings would keep the investors in action," he said.

Rupak De, Senior Technical Analyst at LKP Securities, said Nifty mostly traded sideways after an initially positive start.

"The sentiment remains optimistic as the index stays above critical moving averages. At 21,500, there could be significant immediate resistance. A decisive breakout beyond this level could potentially propel the index into a substantial rally. Until then, the index is expected to remain within the range of 21,300 and 21,500," he said.