After remaining range bound on the weekly expiry day on May 11, benchmark indices settled nearly flat even as the US inflation worries reduced. Though, some buying was seen in the broader market.
The majority of sectors traded in sync with the benchmark and ended flat, however, selective buying in banking, financials and FMCG kept the traders busy. Meanwhile, the market breadth was inclined on the advancing side, thanks to buying in the smallcap space.
The Nifty 50 index declined 0.1 percent or 18.10 points to 18,297. BSE flagship Sensex dropped 35.68 points or 0.06 percent to 61,904.52.
"The current market rally has been largely influenced by consistent FII inflows, driven by lower treasury yields and the weakness of the US Dollar,” said Vinod Nair, Head of Research at Geojit Financial Services.
“However, the gains in the domestic market were tempered by weak earnings reported by a few heavyweight companies. On the global front, markets remained positive as US inflation eased below 5 percent, providing reassurance to investors that the Fed's rate hike measures have been effective in managing inflation levels."
Stocks and sectors
In the Nifty 50, Adani Enterprises, which rose 5 percent, was the biggest gainer. Asian Paints that came out with earnings followed with 3 percent gain. HUL, Adani Ports were other big gainers of the day.
Dr Reddy’s Labs, which also announced Q4 earnings, slumped the most at 7 percent. L&T declined 5 percent while Hindalco, Divi’s Labs and JSW Steel slipped as well.
Nifty auto and Nifty Realty continued to see buying whie Nifty Metala nd Nifty Pharma were among the losers.
OUTLOOK for May 12
Osho Krishan, Sr. Analyst, Technical & Derivative Research, Angel One
Technically, there have been no significant changes in the chart structure as Nifty kept hustling at the higher band throughout the weekly expiry session. However, some timidity could certainly be sensed among the bulls at the higher zone, awaiting some positive trigger to continue the upward march.
As far as levels are concerned, the 18200 zone is likely to cushion any blip in the coming period, while the sacrosanct support lies around the 18100-18000 mark. On the contrary, 18300-18500 is considered a daunting task for the bulls in the comparable period.
We remain sanguine and expect any dip to augur well for the bulls. Meanwhile, the global markets should be watched closely as any further relief could act as a catalyst to open up the next leg of the rally. Going forward, the broader market is keeping the buzz and one needs to adopt a pragmatic approach in such market conditions to seize better opportunities.
Ajit Mishra, VP - Technical Research, Religare Broking
Markets have been maintaining a positive tone but a mixed trend across index majors is capping the momentum. We thus reiterate our view to focus on stock selection and trade management. In the absence of any major event, the performance of the global markets and earnings will remain in focus for cues.
Shrikant Chouhan, Head of Equity Research (Retail), Kotak Securities
Technically, the short term uptrend formation is still positive and the index is consistently forming a higher bottom formation which is also supportive for the bulls. We are of the view that as long as the index is trading above 18200, the uptrend formation Is likely to continue. Above which, the index could move up till 18400-18475. On the flip side, below 18200, the market could slip till 18125-18100.
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