The positive sentiment witnessed in the Indian stock markets on December 21, gained further ground today as Realty, Pharma, Metals and Auto sectors provided strength to the indices aided by positive cues from Asian markets.
Both the 30-pack Sensex and benchmark Nifty ended the day near their day’s high with a gain of 1.1 percent each. Sensex gained 612 points to settle at 56,931 while Nifty gained 185 points to close at 16,955.
“Domestic market is gaining ground amid a positive rebound in the global market. The rebound was broad-based while mid & small caps outperformed as the bargain opportunity led investors to accumulate the beaten-down stocks”, said Vinod Nair, Head of Research at Geojit Financial Services.
Both the indices opened with a gain of more than 0.5 percent in the morning. The Sensex opened with a gain of close to 300 points at 56,599 but pared some gains to make a day’s low of 56,471. It rebounded strongly in the last session and made an intra-day high of 56,989.
The Nifty opened the day higher by 95 points at 16,866. It lost steam earlier in the day to make an intra-day low of 16,820 but strong buying in the closing session helped it make a day’s high of 16,971.
Broader markets also continued from where they had left yesterday and ended in green. The BSE Midcap gained 1.47 percent while BSE Smallcap ended 1.66 percent higher.
India VIX, which indicates the degree of volatility traders expect over the next 30 days, reduced further by 3.9 percent from 17.53 to 16.84.
“The Omicron concerns and FII’s selling may keep investors in a cautious mode, it is a time for selective stock picking with a focus on defensive and growth-oriented sectors rather than rushing to the market", Nair added.
Power Grid Corp, SBI Life Insurance, Wipro, IOCL and Adani Ports were the top losers on the Nifty. The decline in these stocks ranged from 0.4 percent to 2.4 percent.
Hindalco, Tata Motors, Divis Labs, Bajaj Finance and Eicher Motors were the top Nifty gainers. They were up 2.9 to 4.0 percent.
Stocks & Sectors
All sectoral indices gained ground and ended the day in the positive territory. Realty was the top performing sector today along with Pharma, Metal and Auto. All sectors gained between 0.5 to 2.8 percent.
Among individual stocks, a volume spike of more than 200 percent was seen in India Cements, Adani Ports and Berger Paints. Long build-up seen in the Vodafone Idea, Atul and India Cements and short build-up in Vodafone Idea, Dixon Technologies and Whirlpool of India.
There were 27 advances compared to three declines on the BSE during the day.
Technical View
“Nifty formed a Bullish candle on daily scale and has been forming higher highs - higher lows from last two trading sessions’ said Chandan Taparia, Vice President | Analyst-Derivatives at Motilal Oswal Financial Services.
Now it has to cross and hold above 17,000 zones, for an up move towards 17,200 and 17,350 zones whereas support can be seen at 16,800 and 16,600 zones, he added.
“Volatility has been cooling down from the last two sessions which is giving comfort to the bulls for a bounce back move. Now it needs to further cool down to 15-14 zones for complete stability in the market” Chauhan said.
As per Chauhan, Bullish setup was seen in SRF, National Aluminium, IEX, Auropharma, Hindalco, L&TFH, IRCTC, Tata Power, UPL, Cadila, Lupin, Biocon, Eicher Motor, Cumminsind, Mindtree, Godrejcp, Havells, Sunpharma, LT, Deepakntr, Reliance, ABFRL, LTI, UBL and Mcdowell while weakness in SBI Life, IOC and Grasim.
Outlook for December 22
Sahaj Agrawal, Head of Research- Derivatives at Kotak Securities
Nifty is expected to trade with a positive bias for the near term; resistance is expected at 17400-17500 levels. Overall consolidation is expected to continue for some weeks before markets witness a directional move.
We remain selectively positive with preference to frontline stocks over the midcap space. IT and banking are expected to participate while FMCG is expected to underperform in the near term.
Rohit Singre, Senior Technical Analyst at LKP Securities
Index opened a day with gap and managed to hold its bullish stream throughout the day & closed a day at 16955 with gains of more than one percent forming a bullish candle after Doji formation in the previous session which shows positivity.
Index managed to close a day above strong hurdle zone of 16900 now it will act as strong support zone followed by 16800 zone and trading above said levels one can expect a positive moment incoming session so one can use buy on dip strategy near mentioned supports, the immediate hurdle is coming near 17000-17100 zone
Ajit Mishra, VP - Research, Religare Broking Ltd
Markets extended the rebound for the second consecutive session and gained over a percent, tracking firm global markets. After a gap-up opening, the benchmark continued to trade in a range but the bias remained on the positive side.
Buying in select heavyweights from banking and energy space helped the index to close around the day’s high as well. Consequently, the Nifty ended around 16,955 zone; up by 1.1%.
All the sectoral indices ended in the green with realty, pharma and metals being the top gainers. The broader indices, midcap and smallcap also ended with strong gains in the range of 1.7-2.2%.
We’re seeing respite after the recent fall and participants should approach this with caution.
Nifty may extend this rebound and the zone closer to 17,150 would now act as a hurdle.
Importantly, the participation of the banking index is critical for any sustained move while other sectors are doing their bit. Amid all, the news related to the new COVID variant will remain on the market radar.
Gaurav Ratnaparkhi, Head of Technical Research, Sharekhan by BNP Paribas
The Nifty continued with the pullback that had started from the junction of the 40 WEMA & the weekly lower Bollinger Band. With this, the index has filled up the gap of 16,840 – 16,966, which was created on the daily chart during the recent leg of the fall. The hourly chart shows that the index has now reached a falling trendline. In terms of the level, 17,000 is a key barrier to watch out for. If the bulls manage to surpass this hurdle on a closing basis then the recovery can continue till 17,200 in the short term. On the other hand, failure to cross 17,000 mark on a closing basis would drag the index back to the daily lower Bollinger Band, which is near 16,670.
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