Closing Bell: Nifty ends above 14,800, Sensex jumps over 1,100 pts led by IT, metal stocks

Taking Stock | Market Posts Biggest One-day Gain In Two Months; Investors Richer By Rs 3.5 Lakh Crore

The market capitalisation of BSE firms rose to Rs 204.8 lakh crore from Rs 201.3 lakh crore in the previous session, making investors richer by Rs 3.5 lakh crore in a single day.

As expected, the same thing happened in the market today. The formation of a Bullish Harami served as a powerful reversal formation for the market. The Nifty crossed the 14750 levels and moved very close to 14900. Today, all sectors except Bank Nifty and Auto performed well. Tomorrow we would see some increase in bank stocks, mainly because the Bank Nifty closed above the level of 33700. Bank Nifty can go up to 34500/34700. If the Bank Nifty performs, the Nifty could move closer to 14900 and 15050 levels.

Markets started the week on a robust note and gained nearly two and a half percent. The benchmark opened gap-up led by supportive global cues and continue to inch higher as the day progressed, thanks to healthy buying in sectors such as IT, FMCG, metals and healthcare. Consequently, the Nifty ended near day’s high at 14,845 levels, up by 2.3%. The broader markets too ended in positive with gains in the range of 1-1.3%.

It’s surprising the way the benchmark is showing resilience amid mixed cues. Going ahead, upcoming data viz. Core Sector and auto sales along with global cues will remain on the participants’ radar. Needless to say, the recent deterioration of the COVID situation in India has dented sentiment and will be closely watched by the participants in the coming sessions too. We thus reiterate our cautious stance until we see some decisiveness in the trend.

Indian equity benchmarks began the day with an optimistic start, owing to gains in global peers. The benchmarks continued to trade in high spirits in the morning session. In the late afternoon session, the indexes extended their gains and maintained their momentum. We expect 14900 to act as resistance but if the market breaks the level of 14900, we can expect it to continue till the levels of 15300.

Meanwhile, a meeting with Union Minister of Commerce and Industry, Piyush Goyal, US Trade Representative, Katherine Tai said that India and the US will explore ways to broaden trade ties and cooperate on pending bilateral issues which if resolved can have a positive impact on the market. The RBI is slated to announce its first bi-monthly monetary policy of 2021-22 fiscal on April 7, 2021, after a three-day meeting of the Monetary Policy Committee (MPC) headed by RBI Governor Shaktikanta Das.

Indian markets have extended their recovery for a second session, boosted by strength across the board. Global cues have been supportive of the rally since Friday, with both US and European markets advancing to life-time highs. Contributing the most to today's advance were stocks from the metal, IT, and pharma space. Meanwhile, the broader markets have under-performed the large-caps so far, with Midcap and Smallcap index up just a little over 0.7%.

Despite the recovery over the past two sessions, Indian markets have been under-performing their global peers for the past few days. For the short-term, in spite of the generally supportive global cues, we could witness bouts of volatility in the domestic markets. Strengthening dollar and rising US yields, in particular, remain the key forces to watch out for as they could act as headwinds to the short-term recovery. Hence, one needs to trade cautiously and take a sector-specific stance.

Technically, last week's high of 14878 is the immediate hurdle for Nifty. If the index surpasses this level, the recovery could extend towards 14985-15060. Meanwhile, today's low of 14617 now becomes the immediate support to watch out for, break below which is likely to resume the downside pressure on the index.

The Nifty has successfully closed past its resistance zone of 14700-14800. However, I would be more comfortable if we can get past 14950 on a closing basis. That would trigger a rally up to levels closer to 15300. Until we do not get past 14950, there is always a chance we take a U turn from these levels and head southwards to 14400. Extreme caution is advised at the current levels.

The Nifty-50 has again gone above the 50 DMA led by gains in high quality stocks. Except for today’s depreciation, the INR has remained quite steady even though the Dollar Index rose. Also when the US 10 Year bond yields has spiked sharply, India’s 10 Year Bond Yield has remained quite stable. These two factors could act in India’s favour and help Indian equities outperform its peers in the emerging markets.

Recent correction could be due to rising Covid cases and year end phenomenon wherein retail and HNI investors would have avoided taking any fresh positions. The start of new settlement for FY22 and forthcoming Q4 earnings seasons could be the reasons for fresh investor interest in stocks. US markets, especially the Dow Jones and S&P 500 are showing firm uptrend due to the ongoing stimulus and faster vaccination drive which could also be one of the reasons for our markets to inch upwards.

Markets opened firm on strong global cues with Joe Biden slated to announce his USD 3 trillion infra package. Investors shrugged off the rising corona virus cases in few states as the GOI prepares for a vaccine rollout on a larger scale. Steel & IT stocks led the bull charge while FMCG stocks joined the party in late afternoon trade as the Sensex scaled past 50k.

Indian rupee extended the early losses andended near the day'slow level at 73.38per dollar, amid buying seen in the domestic equity market with benchmark indices rose over 2 percent each.

It opened lower at 72.81 per dollar against previous close of 72.67 and traded in the range of 72.76-73.46.

Benchmark indices ended higher for the second day in a row with buying seen in the IT, FMCG, metal and Pharma stocks.

At close, the Sensex was up 1,128.08 points or 2.30% at 50,136.58, and the Nifty was up 337.80 points or 2.33% at 14,845.10. About 1529 shares have advanced, 1386 shares declined, and 197 shares are unchanged.

UPL, JSW Steel, HDFC Bank, Tata Steel and HCL Technologies were among major gainers on the Nifty, while losers were Axis Bank, M&M, Hindalco Industries, Bharti Airtel and SBI Life Insurance.

On the sectoral front, Nifty IT, FMCG, metal and Pharma indices rose 2-3 percent. BSE Midcap and Smallcap indices added a percent each.

After a few days of the lackluster movement, the market witnessed a positive trend in today's market activity. 14,900 (Nifty50 Index level) level is expected to act as resistance. Breakout of the same we may witness the market rally till 15,300. It's going to be crucial for the short-term market scenario to breakout above the 14,900 level.

The market observed that the momentum indicators like RSI and MACD support the upside move and indicate that a fresh breakout's potential is exceptionally high.