Closing Bell: Nifty ends around 18,000, Sensex gains 721 pts; PSU banks outshine

Markets started the week on a strong note and gained over a percent, taking a breather after the recent slide. After the initial uptick, the Nifty index gradually inched higher as the day progressed however some profit taking in the last half an hour trimmed some gains. Eventually, it settled at 18,014 levels; up by 1.17%.

Most of the sectoral indices participated in the recovery wherein realty, banking, metal and energy packs posted decent gains. The broader indices too rebounded swiftly and gained in the range of 2.8%-4%.

Participants shouldn’t read much into a single day rebound and wait for the sustainability of the move. We have the next hurdle around the 18,150-18,200 zone in Nifty, so we recommend utilising further recovery to reduce positions. In absence of any major event, the upcoming expiry of December month derivatives contracts will keep the traders busy.

Nifty remained volatile throughout the session before closing below the crucial resistance level of 18,070. Besides, the index failed to reclaim the 50 EMA on the daily timeframe.

The momentum indicator remains with a bearish crossover, implying weakness. The trend is likely to remain weak over the near term.

The supports are pegged at 17,950/17,800, whereas on the higher end, resistance is placed at 18,100.

After a four-day selloff, the domestic market was refuelled by bottom fishing and optimistic sentiment from global counterparts.

PSBs led the rally, while mid- and small-cap stocks outpaced the benchmark.

Contrary to the trend, global concerns over the recession and COVID spread continue to remain high, which will sustain volatility in the market.

The Nifty had seen a sharp decline in the last week that had pushed the intraday momentum indicators into the oversold zone. In terms of the Fibonacci retracement, the index had reached 50% retracement of the rally from Sept 2022 to Dec 2022. Consequently, the index had a swift bounce on December 26.

It has moved up to retest a trendline, which was broken on the downside on Friday. Thus 18,100-18,200 will be the near term hurdle zone, which will decide further course of action for the index.

Overall structure shows that the Nifty is likely to witness short term consolidation with key support at 17,800.

Indian equites witnessed a strong recovery after the sharp sell-off last week. Nifty opened positive and gained strength throughout the session to close with gains of 208 points (+1.2%) at 18015 levels.

Action was seen in broader market post its 3 consecutive weeks of decline. Both Nifty Midcap 100 and Smallcap 100 outperformed Nifty with gains of 2.7%/3.8% respectively.

Except Pharma, all sectors ended in green. After sharp fall of 3% in Nifty over the last three trading sessions, value based buying emerged at lower levels.

In the absence of any major global events due to year-end holidays, we expect market to remain sideways to positive based on news flows. We expect focus on banks, auto, capital goods and defense sectors to do well in the near term.

The Bank Nifty index witnessed a sharp up move after a massive sell-off in the previous week.

The index downside support now stands at 42,000 where aggressive put writing has been observed.

The next hurdle on the upside is seen at 43,000 where the highest open interest is built up on the call side.

The index remains in buy mode as long as the mentioned support is held on a closing basis.

Indian rupee closed 21 paise higher at 82.65 per dollar on Monday against Friday's close of 82.86.

Close: Benchmark indices ended higher with Nifty closing around 18,000 amid buying seen across the sectors, barring pharma.

At close, the Sensex was up 721.13 points or 1.20% at 60,566.42, and the Nifty was up 207.80 points or 1.17% at 18,014.60. About 2787 shares have advanced, 733 shares declined, and 129 shares are unchanged.

SBI, IndusInd Bank, Hindalco Industries, Tata Steel and Coal India were among the biggest Nifty gainers, while losers were Divis Labs, Cipla, Dr Reddy's Laboratories, Nestle India and Tata Consumer Products.

Except pharma, all other sectoral indices ended in the green with PSU bank index added 7 percent.

The BSE midcap index added 2.3 percent and smallcap index rose 3 percent.

Indian Rupee appreciated by 0.16% on Monday on surge in domestic equities and a soft US Dollar. Domestic indices gained by ~1.5%. US Dollar softened amid improved global risk sentiments and softer inflation in US.

We expect Rupee to trade with a positive bias on weakness in Dollar and positive domestic markets. Decline in safe haven appeal on rise in risk appetite in global markets may also put pressure on Dollar. However, surge in crude oil prices cap sharp upside in Rupee. USDINR spot price is expected to trade in a range of Rs 82 to Rs 83.30.

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