Dalal Street Corner: Sensex, Nifty50 extend rally for 3 sessions in row; what should investors do on Thursday?

Indian markets settled higher for the third straight session as the benchmark indices – Sensex and Nifty50 surged around 1 per cent at the day's close, led by banking, financial and auto stocks on Wednesday.

Sectorally, almost all indices closed positive except for pharma and metal indices: PTI

Indian markets settled higher for the third straight session as the benchmark indices – Sensex and Nifty50 surged around 1 per cent at the day's close, led by banking, financial and auto stocks on Wednesday. While the broader markets, Nifty Midcap and Small cap also closed nearly 1 per cent at the market close.

Of the 50 stocks on Nifty50, 32 advanced and 18 declined at the closing time. HDFC Life and Bajaj Finserv were the top gainers, as each surged by around 3.5 per cent, while ONGC continued to be the top loser, down by over 5 per cent, followed by Hindalco, JSW Steel each tumbled over 4.5 per cent.

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Sectorally, almost all indices closed positive except for pharma and metal indices. Nifty Financial Service gained most by around 2 per cent, followed by bank, auto, which were up over 1 per cent each. Nifty Metal tumbled most by over 2 per cent, followed by pharma which was down 0.2 per cent.

Experts believe, investors’ sentiments improved with ease in crude prices that lead to more buying interest, especially towards riskier assets like equity.

We have collated views from different experts as to what investors should do when trading resumes:

Expert: Neeraj Chadawar, Head - Quantitative Equity Research, Axis Securities

“In the last two weeks, some recovery is visible in the market from the oversold zone led by key drivers like peace talk between Russia-Ukraine, FED decision on an expected line, and State election results in favor of the ruling government.

We continue to hold a positive long-term view on the market supported by the emerging favorable structure as increasing Capex spending enables banks to improve credit growth.

Overall, the Indian market has entered an upcycle of earnings with an expectation of 20% Nifty EPS CAGR growth over FY21-24, which was in a single digit of 7% over FY09-21. We believe the market will likely follow the double-digit earnings growth in upcoming years.”

Expert: Chandan Taparia Vice President | Analyst-Derivatives Motilal Oswal Financial Services

Nifty index opened with a gap on the higher side and moved above 17500 zones. It surpassed its previous hurdle and sustained well at higher zones. It formed a small bodied bullish candle on daily scale with long lower shadow indicating continued support-based buying seen at lower levels.

It came out of its restricted range of the last eight sessions. Now it has to hold above 17450 zones, for an up move towards 17650 and 17777 zones whereas support exists at 17350 and 17222 zones.

Expert: Vinod Nair, Head of Research at Geojit Financial Services.

High volatility prevailed in the global market, but peace talks between Russia and Ukraine gave hopes of de-escalation of the war, helping the domestic market to trade with confidence. The ease in crude oil and commodity prices supported the market as it will help corporates to reduce their margin pressure.

Expert: Sachin Gupta AVP, Research Choice Broking

Technically, the index has been rising continuously from the last three trading sessions and moved above the prior swing highs. Moreover, the index has sustained above 100-EMA on the daily chart that suggests a bullish strength for the coming day.

A momentum indicator RSI (14) is moving above 60 level & MACD is indicating positive crossover, supporting the bullish trend. At present, the index has support at 17340 levels while resistance comes at 17650 levels. While, Bank Nifty has support at 35700 levels and resistance at 36900 levels.

Ajit Mishra, VP - Research, Religare Broking Ltd

Markets continued to trade higher for the third consecutive session largely driven by supportive global cues. After a gap-up opening, the benchmark witnessed some profit booking initially however healthy buying heavyweights across sectors brought back the momentum.

The news of possible de-escalation between Russia-Ukraine and easing in crude oil boosted investors’ sentiments. On the domestic front, the scheduled monthly expiry will keep volatility high so traders should plan accordingly. Amid all, participants should not go overboard and maintain a positive yet cautious stance.

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