Taking Stock | Sensex gains 1,345 points, Nifty above 16,200; LIC sinks on debut

"After a long gap, the market has witnessed a strong resilience supported by heavyweights and broader markets. The market was trading at oversold territory and was inspired by optimism in the Asian markets led by Chinese technology stocks, in hopes of easing regulatory crackdown and declining covid cases," said Vinod Nair, Head of Research at Geojit Financial Services.

The much-watched LIC IPO showed a subdued listing. However, LIC is a decent investment opportunity in the short to medium-term, considering its deep discount valuation, strong market presence, improvement in future profitability due to the changes in surplus distribution norms and strong sector growth outlook, Nair added.

All the Sensex and Nifty50 stocks ended in the green. Hindalco Industries, Tata Steel, Coal India, JSW Steel and ONGC were among the top Nifty gainers.

Among sectors, the Nifty metal index added 6.8 percent, while Bank, Auto, PSU Bank, Energy, IT and Pharma indices rose 1-3 percent.

Inflation, however, continues to be a concern. India's inflation based on the Wholesale Price Index (WPI) rose to 15.08 percent in April from 14.55 percent in March, data released by the commerce ministry on May 17 shows.

The WPI inflation was 10.74 percent a year ago. Another 10 percent-plus print in April means WPI inflation has extended its stay in the double-digit territory to 13 months in a row.

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Stocks and sectors

On the BSE, all sectoral indices ended in the green, with the metal index up over 7 percent and other indices up between 1 and 3 percent.

Broader markets performed in line with the benchmarks, with BSE midcap and smallcap indices gaining more than 2percent each.

A long build-up was seen in Vedanta, Intellect Design Arena and Hindustan Copper, while a short build-up was seen in Aurobindo Pharma, Dr Lal PathLabs and Dalmia Bharat.

Amber Enterprises India, HDFC Asset Management Company and Nilkamal were among the stocks that touched their 52-week low on the BSE.

Among individual stocks, a volume spike of more than 300 percent was seen in Abbott India, Multi Commodity Exchange of India and Coromandel International.

Also Read: Market surges, 4 factors pushing Indian shares higher

Outlook for May 18

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

Markets witnessed a sharp relief rally as the recent slump had pushed key indices into oversold territory.

Traders covered their short positions in several beaten-down stocks that propelled key benchmarks. The rally, however, could be short-lived as unabated FII selling and concerns over further rate hikes to tame inflation may fuel volatility.

On daily charts, the Nifty has formed a long bullish candle, which is positive in the short term.

For the trend-following traders, 16,150 would be the deciding level, above which momentum is likely to continue to 16,380-16,450.

A quick intra-day correction is possible if the index slips below 16,150. The index can then retest 16,080-16,050.

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

The Nifty was trading in a sideways manner for the last couple of sessions. It had formed a Doji pattern on the daily chart on May 16, which was a sign of indecision in the minds of the market participants.

In terms of the price patterns, the Nifty had formed a triangular pattern on the hourly chart. On May 17, the index broke out from this indecisive phase on the upside.

On the way up, the index crossed 16000 as well as the key hourly moving averages, which reinforced the bulls. All these observations suggest that the Nifty has turned its short-term trend positive.

Going ahead, 16480-16500 will be the initial target area from the short-term perspective. On the flip side, 16,100-16,000 will now act as a near term support zone.

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