Nifty sustains 20,000, broader markets too higher; metals and PSUs lead the upmove

"The level of 4.335% on 10-year treasury yields remains crucial for the bulls. The moment yields starts trending above this level we might see a deeper correction in Indian markets," said Apurva Sheth, Head of Market Perspectives and Research, SAMCO Securities.

Benchmarks Nifty 50 and Sensex are holding on to early gains on March 21, with the NSE index reclaiming the 22,000 level, tracking strong cues after the US Federal Reserve stuck with the projection of three rate cuts for 2024.

At 11:22 am, the Sensex was up 695.01 points or 0.96 percent at 72,796.70, and the Nifty was up 221.40 points or 1.01 percent at 22,060.50. About 2,644 shares advanced, 541 shares declined, and 97 shares unchanged.

Nifty Auto, Bank Nifty and Nifty IT - three sectoral indices that are highly sensitive to interest rate decisions - were trading higher by over a percent each.

Global rating agency S&P revised India's economic growth to 6.8 percent for FY25 from 6.5 percent and strong domestic economy data are likely to boost the market sentiment. "Expect positive for auto, metal, IT, infra, PSU and cement stocks," said Vikas Jain, senior research analyst at Reliance Securities.

Federal Reserve holds rates

The global equity markets cheered the Federal Reserve's decision to keep the key lending rate unchanged at 5.25 - 5.5 percent. Additionally, the Fed indicated it will cut the interest rate three times during the current calendar year.

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Japan's Nikkei went up 1.5 percent to a fresh peak over 40,000 in early trade. MSCI's broadest index of Asia-Pacific shares outside Japan jumped 1.6 percent.

"While Fed officials affirmed their view for three rate cuts this year even as they upgraded the economic outlook, they trimmed the number of cuts expected next year from four to three for a slightly shallower pace of easing. Fed officials sharply accelerated their projections for GDP growth this year and now see the economy running at a 2.1 percent annualized rate, up from the 1.4 percent estimate in December," said Deepak Jasani, head of retail research, HDFC Securities.

Technical View

The Nifty shifted into a consolidation movement amid volatility on March 20 and closed the day higher by 21 points. It later shifted into a volatile up and down swing movements for the day and finally closed with minor gains.

"The near-term trend in the Nifty remains weak. Further up-move from here could find strong overhead resistance around 22,150-22,200 levels in the next few sessions and this is likely to be a sell-on-rise opportunity. Immediate support is at 21,700," said Nagaraj Shetti, senior technical research analyst at HDFC Securities.

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