Taking Stock: Market momentum continues; Sensex up 242 points, Nifty nears 18,150

On May 2, the Sensex ended 242 points higher at 61,354.71, and the Nifty was up 82.70 points or 0.46% at 18,147.70.About 2053 shares advanced, 1471 shares declined, and 177 shares unchanged.

Contrary to the "Sell in May and go away", the Indian markets made good gains on May 2, the first trading day of the month. The Sensex closed 242 points, or 0.4 percent, higher at 61,354 and the Nifty ended 82 points, or 0.5 percent, higher at 18,147.70.

Though the Nifty touched an intraday high of 18,147, it ended below the 18,150 mark. About 2,053 shares advanced, 1,472 declined and 176 remained unchanged.

Going forward, the key factor to watch out for will be the Federal Open Market Committee's (FOMC) interest rate decision on May 3. The US central bank begins its two-day meeting later on May 2.

"Defying the trend in global peers, Indian benchmark indices continued its upward momentum, fuelled by strong Q4 earnings and favourable domestic macroeconomic data," Vinod Nair, Head of Research at Geojit Financial Services said.

Stocks and sectors 

ONGC, Tech Mahindra, HDFC Life, Hindalco and Maruti Suzuki were the top stock gainers on the Nifty, while losers included Hero Motocorp, Sun Pharma, UltraTech Cement, Bharti Airtel and Tata Motors.

On the sectoral front, Nifty FMCG and pharma ended in the red, while all other indices ended in the green. Nifty metal was the top sectoral gainers, up 1.42 percent, followed by Nifty energy and IT.

The Broader market also ended higher, with Nifty midcap and smallcap indices gaining over 0.5 percent.

A short buildup, a bearish sign, was seen in RBL Bank, Hero MotoCorp, Atul Auto and United Breweries. A long buildup, a bullish sign, was seen in IndiaMart Intermesh, Indiabulls Housing Finance, BHEL and IDFC First Bank.

Outlook for May 3

Deepak Jasani, Head of Retail Research, HDFC Securities

The Nifty rose with an upgap on May 2 but ended up forming a small body spinning top. Spinning tops are a sign of indecision at higher levels. One must be watchful of the low of the Nifty for the day (18,102) being protected, failing which a correction may ensue.

The level of 18,265 could be the next resistance, while the 18,065-18,089 band could provide support in the near term.

Shrikant Chouhan, Head of Equity Research (Retail), Kotak Securities

Technically, the Nifty has formed a small candle, while on intraday charts it is still holding higher bottom, a formation which is broadly positive.

In the near future, 18,050-18,000 would be the key support zone and 18,200-18,250 the immediate hurdle.

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