24 smallcaps give double digit return in volatile week

On the sectoral front, Nifty PSU Bank gained 9 percent, Metal index 6.6 percent, Realty 6 percent and Media index up 5.2 percent. On the other hand, Pharma index shed 1 percent.

The BSE Small-cap index added 1 percent led by Monarch Networth Capital, PC Jeweller, Kiri Industries, DB Realty, Sasta Sundar Ventures, Zee Media Corporation, Patel Engineering Company and Cerebra Integrated Technologies.

However, Deep Polymers, Future Consumer, SVP Global Textiles, EKI Energy Services, Sanghi Industries, Share India and BEML lost 10-17 percent.

“Worries over aggressive rate actions in the US kept global markets in check as data releases suggested possibilities of inflation remaining elevated for a longer period. Global investors’ interest in equity markets weakened owing to fears of an economic slowdown led by high inflation and contractionary monetary policies,” said Vinod Nair, Head of Research at Geojit Financial services.

“This has triggered the US 10-year bond to rise above 4%, driving foreign money out of emerging countries. However, the trend got reversed towards the end of the week as a Fed official commented on the possibility of a favourable rate hike in the next meeting.”

“The oversold state of the domestic market, along with encouraging macro-economic data and reports of foreign investment in Adani stocks, added optimism. The manufacturing PMI reported better than predicted at 55.3, while the services PMI expanded to its 12-year high of 59.4. However, India's Q3 FY23 GDP statistics came in slightly below expectations at 4.4%,” he added.

The BSE 500 index added 1 percent with with 20 stock gave double digit return including Macrotech Developers, Adani Enterprises, Adani Ports and Special Economic Zone, Adani Green Energy, Adani Wilmar and Adani Power.

The Foreign institutional investors (FIIs) continued the selling in this week, as they sold equities worth Rs 6,010.44 crore, however, domestic institutional investors (DIIs) bought equities worth Rs 6,010.44 crore.

Where is Nifty50 headed?

Amol Athawale, Deputy Vice President - Technical Research, Kotak Securities

Indian markets reacted to strong positive undercurrent across the global equities that triggered a massive bout of short covering in key sectors. Markets were in a fall season and hence the valuations had become attractive prompting traders to shrug off the weak sentiment.

Technically, the Nifty has formed a double bottom near the 200-day SMA (Simple Moving Average) and bounced back sharply. The index has also formed a promising bullish candle on daily and weekly charts which supports further uptrend from the current levels.

As long as the index is trading above 17,400 the uptrend wave is likely to continue. Meanwhile, the Bank Nifty successfully cleared the 20-day SMA mark which is broadly positive.

For the Bank Nifty, 41,000 or 20-day SMA could be the immediate support zone. Above which, it could move till 41,700-42,300 levels.

For short term traders 17,550-17,500 would be the immediate support level while 17,700-17,850 is the crucial resistance.

Jatin Gedia, Technical Research Analyst, Sharekhan by BNP Paribas

We believe that there is more steam left to this pullback rally and hence it can extend higher till 17,700 where resistance in the form of the 50% fibonacci retracement level (17,695) and the 20-day moving average (17,703) is placed.

Considering the sharp upmove in Friday’s trading session a consolidation cannot be ruled out.

Overall, we expect the Nifty to trade in the range of 17,700 – 17,200 from short term perspective.

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