Closing Bell: Nifty ends above 17,700, Sensex gains 311 pts; metal, auto, banks rally

Taking Stock: Rally on seventh day push Nifty above 17,700; Sensex rises 311 points

The BSE midcap index was up 0.4 percent and smallcap index gained 0.6 percent.... Read More

Nifty remained volatile throughout the session as the traders awaited CPI data, which is scheduled tomorrow. The index has been sustaining above critical moving average. Besides, the Nifty has so far remained above the crucial support level of 17,500.

The market will remain a buy on dips as long as the index remains above 17,500. Immediate support is visible at 17,640. On the higher end, the rally may extend towards 17,850/17,970.

Markets managed to inch higher in a volatile session, in continuation to prevailing positive tone. On the bechmark front, Nifty settled closer to day’s high to end at 17,722.30; up by 0.56%.

Most of the sectors traded in line and posted decent gains. However, dip in IT majors ahead of earnings capped momentum. Meanwhile, continued recovery on the broader front added to positivity.

Nifty has crossed 17,700 but sustainability would be the key now to test 18,100+ zone. A lot would depend on how the earnings season pans out. Amid all, we recommend continuing with the " buy on dips" approach with focus on stock selection and risk management.

The Nifty continued with positive momentum and closed with gains for the seventh consecutive trading session. On the daily chart, we can observe that the Nifty has closed exactly at the resistance zone of 17,700 – 17,730 where the daily upper Bollinger band and the upper end of the falling channel is placed.

Despite the negative divergence on the hourly momentum indicator there is no weakness on the price front and the best strategy to trade such an upmove is to hold on to the long positions with a trialing stoploss mechanism. Since last seven trading sessions, the Nifty has not dipped below the previous day low which is an extremely bullish sign and can also be used a crucial level for holding on to the long positions.

In terms of levels crucial support is placed at 17,655 – 17,650 while immediate hurdle is placed at 17,700 – 17,730. Overall, the uptrend is still intact, and we expect Nifty to target levels of 17,800 from short term perspective.

Strong Asian and European market cues bolstered the ongoing bullish sentiment and lifted the Sensex above the crucial 60,000-mark. Although the rally seems to be stretched, the feel good factors like interest rate status quo by the RBI, robust GST collections and mixed economic growth numbers are giving investors the ammo to bet on domestic stocks. While IT stocks tumbled ahead of earnings announcements by frontline companies this week, metals and banking stocks led the broad market rally.

Technically, on intraday time frames the market is holding higher high and higher low formation and after a sharp pullback rally it is comfortably trading above the 50-day SMA (Simple Moving Average) which is largely positive.

For the trend following traders, 17,650 would act as a key support level and above the same, the Nifty could move up till 17,800-17,835. On the flip side, below 17,650 a quick intraday correction is likely, which could pull down the index up to 17,550-17,500.

The Indian rupee erased Monday’s gain following corporate dollar outflows and dollar demand from the importers.

Local traders will eye on tomorrow’s inflation and IIP data for a directional move. The market consensus is expecting lower inflation numbers along with slower output growth.

Spot USDINR may consolidate between 81.70 to 82.50 in the near term.

The domestic equity indices showed resilience and remained in positive territory, primarily led by banking and auto stocks on the expectation of strong quarterly earnings following robust business updates.

The forthcoming CPI inflation data due on Wednesday is expected to remain below the RBI’s upper tolerance level of 6 percent. Meanwhile, in the United States, inflation is projected to decline further from its current level of 6 percent. The US inflation figures, along with the FOMC meeting minutes, are likely to exert a dominant influence on the global market trend.

Indian rupee closed 14 paise lower at 82.12 per dollar against previous close of 81.98.

Benchmark indices ended higher on April 11 with Nifty above 17,700 supported by buying across the sectors barring information technology.

At close, the Sensex was up 311.21 points or 0.52 percentat 60,157.72, and the Nifty was up 98.30 points or 0.56percentat 17,722.30. About 2,183 shares advanced, 1,260 shares declined, and 109 shares were unchanged.

Kotak Mahindra Bank, JSW Steel, Eicher Motors, Bajaj Auto and Tata Steel were among the major gainers on the Nifty, while losers included HCL Technologies, TCS, Infosys, Asian Paints and Wipro.

Among sectors, auto, bank, metal, oil & gas, power indices rose 1 percent each, while the IT index fellnearly 1 percent.

The BSE midcap index rose0.4 percent and the smallcap index gained 0.6 percent.

Lemon Tree Hotels announced its latest signing of two franchised hotels- Lemon Tree Premier, Budhanilkantha, Kathmandu, Nepal and Lemon Tree Resort, Lumbini, Nepal. The two combined bring on board almost 200 keys and take the count up to five properties in Nepal under different brands of the Lemon Tree umbrella.

Lemon Tree Hotels Ltd. was quoting at Rs 77.30, up Rs 0.78, or 1.02 percent on the BSE.