Reliance, ITC push Sensex 1344 pts up, Nifty above 16150 may hit 16450 soon; what to expect from D-St on Wed?
BSE Sensex and Nifty 50 ended higher for the second consecutive day on Tuesday. BSE Sensex ended 1344.63 points or 2.5 per cent up at 54,318, while NSE Nifty 50 settled at 16,259. Index heavyweights such as Reliance Industries Ltd (RIL), ICICI Bank, Infosys, ITC, TCS, and L&T contributed the most to the indices’ gain. Broader markets performed in line with equity frontliners. S&P BSE MidCap index jumped 2.5 per cent or 556 points to end at 22,701, while S&P BSE SmallCap index added 2.78 per cent or 712 points to finish at 26,318.
S Ranganathan, Head of Research, LKP Securities
A ferocious up-move from the metal index lifted Reliance Industries Ltd together with other sectoral indices in afternoon trade today leaving bears gasping and covering short positions and looking out for reasons for the rally. On a day when WPI for April crossed 15%, the 2.7% rise in benchmark indices coupled with the breadth of the rally surprised many on the street despite the move coming after a relentless fall.
Milind Muchhala, Executive Director, Julius Baer India
The Indian equity markets, in line with the global equity markets, seem to be in the midst of a perfect storm, displaying an extremely high level of volatility. We have been cautious on the markets for some time and we expect the uncertainty and volatility to continue in the near term. In fact, over the past few days, all intra-day recoveries are getting sold off, and various technical levels are getting broken, making the markets more nervous. The markets will continue to remain influenced by incremental news flows related to central bank actions, especially the US Fed, and inflationary trends. In the short-term, there could be some technical pull-backs in the markets, considering the excess pessimism that seems to be floating around and the oversold conditions that we are into. Even from the FIIs perspective, they seem to be holding one of the lowest net long positions in the recent times in the F&O segment, which can trigger some short covering in case the markets were to start moving up. However, we seem to be into a slightly long-drawn phase of consolidation for the markets with bouts of significant intermittent volatility.
Shrikant Chouhan, Head of Equity Research (Retail), Kotak Securities Ltd
Markets witnessed a sharp relief rally as the recent slump had put key indices in an oversold territory. Traders covered their short positions in several beaten-down stocks that propelled key benchmarks today. However, the rally could be short-lived as the unabated FII selling coupled with concerns of further rate hikes to tame inflation may fuel volatility. On daily charts, Nifty has formed a long bullish candle which is broadly positive in the short term. For the trend following traders, 16150 would be the trend deciding level, above which the positive momentum is likely to continue till 16380-16450. On the flip side, a quick intra-day correction is possible if the index slips below 16150. Below the same, the index could retest the level of 16080-16050.
Vinod Nair, Head of Research, Geojit Financial Services
After a long gap, the market has witnessed a strong resilience supported by heavyweights and broader markets. The market was trading at oversold territory and was inspired by optimism in the Asian markets led by Chinese technology stocks, in hopes of easing regulatory crackdown and declining covid cases. The much-watched LIC’s IPO showed a subdued listing. However, we believe that LIC is a decent investment opportunity in the short to medium-term; considering its deep discount valuation, strong market presence, improvement in future profitability due to the changes in surplus distribution norms and strong sector growth outlook.