A historic week for Indian market as Nifty50 surpassed its previous peak of 15431 recorded back in February 2021 to register a new high of 15,469.65 on Friday. The S&P BSE Sensex is still 1094 points away from its peak of 52,516 registered on February 16.
Bulls dominated the price action on D-Street as gains were seen across the board. The S&P BSE Sensex rose 1.75 percent while the Nifty50 was up 1.71 percent for the week ended May 28 compared to 0.8 percent rise seen in the BSE Midcap index, and 1.5 percent rally seen in the Smallcap index.
Among the top 500 firms in the S&P BSE 500 index as many as 25 of them registered double-digit returns for the week ended May 28 that include names like EIH, ZEE Entertainment, Punjab National Bank, ABB India, Birlasoft, and Lux Industries, etc. among others.
Both domestic and global cues dominated the price action on D-Street. On the domestic front -- fall in COVID cases, strong results from India Inc. as well as various media reports suggesting a relief package from the government to support the economy supported the sentiment.
On the global front, FIIs were net buyers in the cash segment for 4 out of 5 trading sessions, as well as the opening of the US economy supported risk-on trade across the globe.
"Steady decline in fresh COVID-19 cases, expectations of another set of relief measures, global cues, and improved corporate earnings buoyed the market this week. As per reports, the central government is preparing the next set of support measures in order to minimise the economic impact of the second wave, especially in the worst-hit sectors,” Vinod Nair, Head of Research at Geojit Financial Services told Moneycontrol.
“Additionally, Fed officials reiterated that inflation is transitory, beating down worries. Fall in US jobless claims has also helped in raising optimism in the global market as it pointed towards the early opening of the US economy,” he said.
Nair further added that the sustenance of the rally is supported by the recent improvement in foreign investment with a stabilizing US yield as well as a drop in the dollar index, and on the domestic front, expectations of state-wise unlocking due to declining COVID-19 cases lifted hopes of economic recovery.
Technical View:The Nifty50 hit a fresh record high on Friday along with small & midcap indices, but the Sensex is still behind by 1000 points at 51400 and the main reason is the underperformance in HDFC and HDFC Bank.
The Nifty has managed to break the previous peak of 15430 levels recorded on February 16, after 16 weeks of consolidation or roughly 100 days. As long as the index stays above 15100 levels, the momentum is likely to continue till 15500-15600 which will act as the next resistance level for the index.“16-week consolidation is the biggest and time-consuming consolidation which will definitely give good support to the market. According to Weekly and Daily formation, the Nifty can stop once between 15500 and 15600 levels,” Shrikant Chouhan, Executive Vice President, Equity Technical Research at Kotak Securities said.
“The 15,250 and 15,100 are big pillars for the market and as long as the Nifty stays above 15100, we can see the level of 16000 to 16200,” he said.
Chouhan further added that the strategy should be to buy on dips. Bank-Nifty is also showing strength and we can see the level of 36500 in the coming weeks. Bank-Nifty's main support is 34400 and 34000.
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