Closing Bell: Nifty ends above 15,150, Sensex gains 254 pts led by IT, metal, pharma names

Taking Stock: Nifty, Sensex End Higher For Third Straight Session; Mid & Smallcap Outperform

More than 200 stocks, including Quick Heal Technologies, IFCI and Mindtree hit a fresh 52-week high on the BSE.

The Indian rupee has been gradually inching lower after witnessing major resistance around 72.40-72.20 area amid the surge seen in the US dollar index. Effective coronavirus vaccines and stimulus measures are working their way to boost economic growth in the US, boosting the appeal of greenback.

The street is also pricing in the fact that central banks could start cutting back their support sooner than expected, due to the pick-up in inflation, which is leading to a rise in bond yields. All this doesn’t augur well for the domestic currency while rising crude prices are also acting as a headwind for the domestic currency.

Going ahead, we expect the Indian rupee to drift lower towards 73.50 mark in the near term. All eyes would now be on the ECB policy meet and further progress on the USD 1.9 trillion stimulus package.

Markets traded lackluster and ended marginally higher amidst mixed cues. Initially, upbeat global cues triggered a firm start in the benchmark but lack of follow-up buying and profit-taking in the index majors capped the upside. It hovered in a range till the end however movement on the broader front kept the participants busy. Consequently, the Nifty index ended higher by 0.5% at 15,178 levels. On the sector front, IT, Auto and Capital Goods were the top gainers. The broader indices performed in line with the benchmark wherein both Midcap and Smallcap ended higher by 0.8% and 1% respectively.

Nifty has been hovering within the 14,900-15,300 zone and a decisive break on either side would trigger the next directional move. Meanwhile, traders have no option but to limit their leveraged positions and maintain a stock-specific trading approach. The upcoming macroeconomic data i.e. IIP and CPI combined with cues from the global markets will dictate the trend ahead.

Today, the market closed at the level of 15,170 and reached a high, however, traders were not keen to carry positions due to the bank holiday on Thursday. It can also happen on Fridays, as it can be a weekend getaway. Next Monday we can see a strong trend.

Technically, the market closed above the level of 15,150/51,250, which could maintain the market's bullish continuation. We may see at least 15,280 or 15,350 levels in the near term. However, if the Nifty fails to break the 15,280 level, it may send the market to consolidation between 15,000 and 15,280. If the index goes below 15,000/50,750, the bullish trend will break. Bond yields and the dollar index would once again determine the market trend in the coming days.

Nifty50 larger trend remains positive; in the market near term expect resistance of 15,600 and support/buying zone seen at 14,950-15,000. Any correction is expected to provide meaningful buying opportunity. Remain positive on IT and FMCG; select NBFC stocks are showing strong momentum.

There has been a trend of weakening institutional participation in markets, coinciding with a lack of trend in overall indices. Volatility in global bond and commodities markets have induced uncertainty factors that do not appear to be fully reflecting in equities.

Going forward, IT sector can be expected to be an out-performer in a defensively positioned market environment, and an extension of recent under-performance by mid-caps appears likely. Going into year-end, seasonal tightness of liquidity in money markets would manifest itself in a weaker INR and some pressure on financials names.

This week USDINR spot is trading sideways between 72.75-73.30 tracking the trend in US bond yields. Now the attention turns to the release of US inflation figures for February due tonight, which will ultimately dictate the path forward for bond prices ahead of next week’s FOMC monetary policy meeting.

The market expects US inflation to remain elevated compared to January figure and this may add further uptrend in US yields and dollar index. So in USDINR spot, we expect 72.70-72.75 to act as a crucial support, a break of which can push prices towards 72.50 zone, while 73.25 will act as an immediate resistance.

Rupee traded in a volatile range between 72.75 to 73.00, prices being unstable with dollar index witnessing volatile moves daily due to vaccines rollouts, Crude prices retracing from USD 70& importantly Stimulus package rolling out from US Government. Prices of rupee can be seen in a range of 72.70-73.15.

Domestic markets mirrored positive cues from its global peers, tracking gains from the US market as bond yields pulled back easing concerns about rising inflation. As per the data published by the Federation of Automobile Dealers Association, the retail sales for February grew 10.59% YoY after reporting a 4.4% decline in January keeping the outlook for the sector intact. However, two-wheeler, three-wheeler and commercial vehicles continued to see sluggish demand. Buying interest was broad-based led by IT, pharma and metal stocks.

The Nifty has not been able to get past 15,300 and hence the markets continue being sideways. If we get past that level, we should be able to achieve 15,500-15,600. The index has got a good support at 14,800 and till that holds, the overall trend is positive. Any dip or intraday correction can be utilized to accumulate long positions.

With Technology stocks doing well on NASDAQ the day clearly belonged to Midcap IT as the street demonstrated increased appetite today for Technology. Broader markets witnessed good investor interest in Metal stocks. Several Small-Cap names across sectors were sought after as a lower interest rate scenario is seen beneficial to them.