Closing Bell: Nifty above 19,450, Sensex gains 138 pts; power, realty shine, metals drag

Taking Stock: Last-hour buying to rescue again; Sensex up 138 points, Nifty above 19,450

UltraTech Cement, Apollo Hospitals, NTPC, Infosys and Tata Motors were among the top Nifty gainers, while losers included Tata Steel, Adani Ports, Hindalco Industries, HDFC Life and Bharti Airtel... Read More

The Bank Nifty index recently found support at a crucial level, the 100-day moving average (DMA), positioned at 43600.The index's potential to experience a pullback rally is contingent on maintaining this level above the 100DMA on a closing basis.The immediate obstacle for the index is situated around 44000. An upward breach beyond this level could validate a move towards 44300 or 44500 levels.

Nifty bounced back from the lowest point of the day. Nevertheless, the short-term outlook remains feeble, given that the index concluded the session below the vital short-term moving average (21EMA). The Relative Strength Index (RSI) shows a bearish crossover, further amplifying the pessimistic sentiment. The prevailing trend will continue to lack strength as long as it maintains levels below 19521, where the 21EMA is situated. Looking downward, the initial support level is positioned at 19250.

Bulls were in total control despite cautious mood in global stock markets amidst value buying and bargain hunting. After wobbling in the morning session, markets regrouped at lower levels as the benchmarks raced higher to end the session in green. Technically speaking, if today’s bullish action is any indication, then all eyes will be on Nifty’s all-time high at 19992 mark with an inter-month perspective.

The initial apprehension stemming from an above-expected surge in domestic CPI inflation, driven by higher food prices, induced volatility in the Indian market. However, the market found some relief as the likelihood of this inflation surge being transitory alleviated concerns, leading to a recovery in the latter part of the trading session. Moreover, as core inflation continued to moderate, the market did not anticipate a rate hike, although the possibility of an extended rate pause seemed more probable.

Stronger-than-anticipated retail sales data in the US and concerns about further rating downgrades of US banks contributed to choppiness in Western markets, while Asian markets reacted to the rate cut initiated by the Chinese central bank.

Nifty ended minorly in the positive for the second consecutive session on Aug 16 after recovering sharply from the morning weakness. At close, Nifty was up 0.06% or 12.4 points at 19446.9. Volumes on the NSE continued to be on the lower side compared to recent average. Broad market indices rose more than the Nifty even as the advance decline ratio rose to 1.06:1.

Asia-Pacific markets declined on Wednesday, amid worries over discouraging data on China, as well as over the future of the US economy. European stocks were muted after their slump on Tuesday as investors awaited further clues on the path of interest rates from the US Federal Reserve and announcement of a meaningful stimulus from Beijing.

Nifty formed a higher top and higher bottom formation compared to the previous session. Intraday falls keep attracting buy-on-dips action. Nifty needs to cross 19558 to beget higher confidence in the upmove. 19296 could be a support in the near term.

Markets showed resilience amid weak global cues and ended marginally in the green. After the initial downtick, Nifty inched gradually higher as the day progressed and pared all the loss to close at 19465 level. Meanwhile, a mixed trend on the sectoral front kept the traders busy wherein realty, auto and pharma attracted buying interest while metal and banking remained subdued. The broader indices too witnessed a similar trend as the smallcap index managed to gain over half a percent while the midcap ended flat.

The recent move shows a tussle around 19,300 in Nifty and feeble global cues might deteriorate the sentiment ahead. In case of a rebound, the 19520-19650 zone would be hard to cross. We thus reiterate our view to keep a check on positions and maintain focus on risk management.

While volatility continued to remain the ongoing theme, markets rebounded in late trades amid buying in IT, realty and power stocks, although metals came under hammering on worries slackening demand in China could hurt sentiment going ahead.

Despite the recovery, markets are likely to witness choppy trends in the near term on concerns that higher inflation in both domestic and global economies could delay the end of rate tightening cycle and may slowdown growth further.

Technically, the bullish candle on daily charts and higher bottom formation on intraday charts are indicating further uptrend from the current levels.

For the trend following traders, 19400 would be the key level to watch out for and above the same, the market could move up till 19550-19575. On the flip side, a fresh sell off could be seen after the dismissal of 19400. Below which, the index could retest the level of 19350-19300.

Benchmark indices ended on a positive note in a highly volatile session on August 16 with Nifty around 19,450.

At close, the Sensex was up 137.50 points or 0.21 percent at 65,539.42, and the Nifty was up 30.50 points or 0.16 percent at 19,465. About 1741 shares advanced, 1763 shares declined, and 132 shares unchanged.

Major gainers on the Nifty were UltraTech Cement, Apollo Hospitals, NTPC, Infosys and Tata Motors, while losers were Tata Steel, Adani Ports, Hindalco Industries, HDFC Life and Bharti Airtel.

Except bank and metal, all other sectoral indices ended in the green with auto, power, realty, IT, pharma and capital goods up 0.5-1 percent.

BSE midcap index rose 0.2 percent and smallcap index added 0.5 percent.

-Buy rating, target at Rs 530 per share
-Key businesses reported strong momentum
-Cigarette volumes up 8% & FMCG revenue growth 16%
-Underlying margin expanded in both, other segments were generally mixed
-Think stock continues to offer value & provide high earnings visibility

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