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Taking Stock | Market snaps two-day losing streak; Sensex up 548 points, Nifty 16,600

The market seems to have factored in a 75 bps hike in rates by the US Fed but may see volatility on the monthly F&O expiry day and if the American central bank gets more aggressive, say analysts

July 27, 2022 / 05:07 PM IST

The Indian equity benchmarks snapped their two-day losing run helped by positive global cues and some sets of healthy June numbers posted by companies at home.

At close, the 30-pack Sensex was up 547.83 points, or 0.99 percent, at 55,816.32, while the broader Nifty ended the day with a gain of 157.95 points or 0.96 percent at 16,641.80.

“Indian market will react to the global trend in-line with FOMC meeting outcome,” said Vinod Nair, Head of Research, Geojit Financial Services. He was referring to the outcome of the US Federal Reserve meeting to be shared late in the day.

“We are in a rally during the last one and half months assuming that much is factored in the price, however, the market has not factored in a recession as valuation continues to trade marginally above the long-term trend,” Nair said. Value buying should be the essence of investment till the risk of a recession subsides, the analyst said.

The markets seem to have ignored the IMF’s move to cut India’s growth forecast for FY23 by 80 bps 7.4 percent, while the expected 75 bps hike in the interest rates by the Fed is already factored in.

Close

Strong results by the engineering, procurement and construction giant L&T as well as the strong order flows it witnessed during the June quarter instilled confidence in investors about the health of the Indian economy.

Bharti Airtel, Bajaj Auto, UPL, Hero Motocorp and Kotak Mahindra were the top losers on the Nifty, losing between 0.4 to 1.3 percent. The top gainers were Sun Pharma, SBI, Divis Labs, Larsen & Toubro and Asian Paints, up between 2.5 and 3 percent each.

All sectors ended in the green, with the Nifty Pharma index gaining the most at 2.39 percent. The Nifty information technology (IT) index was up 1.68 percent and the realty closed a percent higher.

IndexPricesChangeChange%
Sensex59,462.78130.18 +0.22%
Nifty 5017,698.1539.15 +0.22%
Nifty Bank39,042.30162.45 +0.42%
Nifty 50 17,698.15 39.15 (0.22%)
Fri, Aug 12, 2022
Biggest GainerPricesChangeChange%
ONGC139.206.40 +4.82%
Biggest LoserPricesChangeChange%
Divis Labs3,726.20-221.85 -5.62%
Best SectorPricesChangeChange%
Nifty Energy27163.95502.20 +1.88%
Worst SectorPricesChangeChange%
Nifty IT29885.90-347.80 -1.15%

Stocks & Sectors

On the BSE, except the BSE telecom, all sectoral indices closed higher. The BSE healthcare index was the biggest gainer, closing 1.73 percent higher, while the capital goods jumped 1.68 percent. Strong gains were also made by the IT index which ended 1.34 percent higher from the previous day.

Broader markets also gained, with the BSE midcap index rising 0.90 percent and the BSE smallcap 0.38 percent.

The India VIX, which indicates the degree of volatility traders expect over the next 30 days, declined 0.22 percent from 18.17 to 18.13.

A long build-up was seen in Laurus Labs, Coromandel International and GNFC, while a short build-up was witnessed in McDowell, M&M and Tata Power.

Among individual stocks, a volume spike of more than 150 percent was seen in GNFC, Oberoi Realty and United Breweries.

More than 100 stocks, including Adani Enterprises, Coromandel International and ITC, touched their 52-week highs on the BSE.

Outlook for July 28

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

Investors seemed to have priced in a 75 bps rate hike by the US Fed, while recovery in other Asian indices contributed to the overall uptick in markets. Markets, however, may see bouts of volatility ahead of the monthly F&O expiry on July 28.

Technically, after the correction in the last two sessions, the Nifty took support near 16,450 and reversed the trend.

It also formed a promising bar reversal bullish candle on the daily chart. The texture of the chart indicates continuation of the uptrend in the near future.

For the trend-following traders, 16,550 will be the decider level and above it, the index can hit 16,750-16,800.

On the flip side, below 16,550, the uptrend will be vulnerable and the index can retest 16,450-16,400.

Gaurav Ratnaparkhi, Head of Technical Research, Sharekhan by BNP Paribas

The Nifty breached the near-term support zone of 16,500-16,480 on an intraday basis and entered into a recent gap area on the daily chart. The selling pressure, however, was absorbed near the hourly lower Bollinger Band. Thereon, the index bounced back.

The overall structure, however, shows that the index is still in a short-term consolidation mode and can witness range-bound moves.

The level of 16,360–16,750 is expected to be the short-term range for the index. It is likely to face selling pressure near 16,700-16,750 as it inches closer to the upper end of the range.

Ajit Mishra, VP-Research, Religare Broking Ltd

On July 28, markets will react to the outcome of the US Fed meeting in early trade. Besides, the scheduled expiry of the July month derivatives contract and earnings announcements would keep the participants busy.

We reiterate our view to focus on sectors and themes which are relatively strong and use the intermediate correction to accumulate.

Disclaimer: The views and investment tips of experts on Moneycontrol.com are their own and not those of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.

 
Gaurav Sharma
first published: Jul 27, 2022 05:07 pm
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