Closing Bell: Sensex rebounds 282 points, Nifty ends above 12,850; Midcap, Smallcap outshine

Nifty50 index closed the week with a mild gain after making an all-time high of 12,963. But now the benchmark index has formed a bullish reversal pattern which opened with a gap near highs of the week and then gave up all the gains. The rally’s velocity has also been declining along with the volume participation. Infact, Nifty has started facing resistance at the rising channel visible on the weekly chart and might continue to struggle going ahead as it lacks participation from the top index movers like ICICI Bank, HDFC and banking stocks, who have also become a bit stretched on the upside in the short term. We suggest traders to keep an eye on the benchmark and go short unless it breaks the rising channel on the upside.

: Nifty rejected to sustain below the lowest level of the previous day 12,745 and the support level of 10-day SMA, which is an indication of the firm grip of bulls. However, world cues are deteriorating that would impact at least in the short term trend of the market. In the coming week, it is mandatory for the market to cross the level of 12,970, in case Nifty fails to break 12,970 then it would result in a short term weakness. Below 12,730 levels, Nifty could fall to 12,630 or 12,530 levels. On the upside, above the level of 12,970 Nifty could rally to 13,100 or 13,200 levels. Be stock specific for the time being. For the coming week, Nifty FMCG and Nifty Pharmaceutical should be in the watch list.

: Although the market showed high volatility in the first half, a sharp recovery was seen in the market which was strongly supported by the banking sector. Banking indices are marching towards its pre-COVID valuations in spite of concerns over NPA recognitions. Global markets are moving cautiously amid a rise in the covid related cases and conflicting views over US fiscal stimulus. The overall market momentum going forward will depend on the progress associated with the effectiveness of vaccine distribution, a major factor determining economic recovery.

: After respecting the short term support of 12,750, the Nifty clawed back from negative territory in a jiffy. We notice inclining volumes when markets are rising which is testament to a strong upside momentum. There is every possibility that we will achieve 13100 next week.

: In a volatile session, financials led by Kotak Mahindra Bank and Bajaj twins helped the bulls to wrest control with able support provided by few heavy weights across sectors. The broader market saw buying interest in insurers and defence stocks.

The market rebounded sharply, though could not recoup all its previous day's losses. The benchmark indices as well as broader markets participated in today's run up.

The Nifty50 closed at 12,859, up 87.30 points and the BSE Sensex jumped282.29 points to43,882.25, driven by banking & financials, FMCG and IT stocks.

The Nifty Midcap index was up 0.85 percent and Smallcap index gained 1.2 percent amid positive market breadth.

"We witnessed some swift recovery from its short-term support around the Nifty50 Index level of 12,750-12,730 in the market. The expected level should range between 12,750 and 12,950 and it’s going to be crucial for the short-term market scenario. Though, technical evidence is not supporting any bullish movement, however, the market may play in this range, eying on the possibilities for another round of stimulus in the US economy,"AshisBiswas, Head of Technical Research at CapitalViaGlobal Research said.

The benchmark indices as well as broader markets remained strong in late trade. The Nifty50 was up 85.30 points at 12,857 and the BSE Sensex gained290.20 points at43,890.16, while the Bank Nifty rose350.55 points or1.21 percent to29,253.60.

Infosys and the ATP, have today announced the renewal of their highly successful partnership for a further three years. "The agreement will see Infosys continue as Global Technology Services Partner and Digital Innovation Partner of the ATP, through 2023," said the IT company in its BSE filing.

"The three-month LME copper prices are trading near the $7,132 level, which is the highest level since July, 2018. The overall trend is likely to remain firm, on the back of a positive outlook about China’s economy, although the worsening coronavirus pandemic situation in the US and European countries, is likely to keep a lid on the rally,"AbhishekBansal, Founder Chairman at AbansGroup said.

"Meanwhile, copper found support from stimulus hopes. Republican leaders in the US Senate have agreed to resume negotiations with the Democratic Party on a new round of potential anti-pandemic stimulus bill," he added.

"The Committee of directors in a meeting hasapproved the issue of NCDs for an amount up to Rs40 crore on private placement basis. The committee also granted an in-principle approval for increase in overall limit for issuance of Commercial Paper by Rs100 crore," company said in its BSE filing.

"Global markets were also buoyant today on news of successful trials of Moderna’s Corona Vaccine. With the end of the earnings season, focus will shift back to economic recovery and market valuations. Risk to the markets is from a resurgence of COVID infections in India,"SanjeevZarbade, VPPCGResearch at KotakSecurities told Moneycontrol.

"We advise investors to focus on building a portfolio of quality stocks across market caps," he said.