Surge in cases led to a highly volatile session in markets. Here's what should investors do
Technical charts suggest buy on dips opportunity in the market which is a positive sign, say experts
Indian equity indices, Sensex and Nifty ended Thursday’s volatile session higher led by gains in metals and pharma stocks. In the first half of the trading session we saw the benchmarks Sensex and Nifty hit a low of 48,010 and 14,353, respectively.
A record spike of over 200,000 daily Covid-19 cases, weekend curfews, extensions of night curfews in several states, and WPI inflation at an 8-year high of 7% had made investors jittery, pushing them to take profits off the table. Retail investors are also turning cautious on their money as they sense a delay in economic recovery.
The sudden rise in Covid cases and the micro-lockdowns in India have also made foreign brokerages trim their return expectations from Indian markets.
However, last hour gains primarily driven by buying in metal and pharma stocks, helped BSE Sensex and Nifty 50 to end near day’s high. BSE Sensex ended up 260 points or 0.53% up at 48,804, while the broader Nifty 50 settled at 14,481.
In the broader markets, the S&P BSE MidCap and SmallCap indices ended 0.1% and 0.03% lower at 19,923 and 20,800 levels, respectively.
HDFC, HDFC Bank & ICICI Bank were amongst the top contributors to Nifty. Pharma stocks were amongst top gainers amid rising COVID cases. Whereas profit booking was seen in select FMCG and IT stocks such as Nestle India, Britannia, Infosys and Tech Mahindra.
Overall, the Nifty Bank, Pharma, Metal, IT, Financial Services, and Private Bank indices ended up to 1.4% higher while the Nifty Auto, Realty, PSU Bank, and FMCG slipped between 0.04% and 1.5%.
Here’s how experts see markets trading tomorrow
Nagaraj Shetti, Technical Research Analyst, HDFC Securities
After showing a sustainable upside bounce on Tuesday, Nifty witnessed another decent up move amidst volatility on Thursday and closed the day higher by 76 points.
Technically, it indicates a buy-on-dips opportunity in the market and this is positive indication. Having sustained near the lower range/key support around 14300-14250 levels for the last two sessions, the odds of further upside bounce near to the upper range of 14800-14900 likely in the next few sessions.
The short-term trend of Nifty continues to be positive with volatility. There is a possibility of further upside in the next few sessions towards 14800 levels before showing a decline again from the highs. The overall long-term chart pattern indicates that this is going to be a last rise before the sharp weakness from the highs. Immediate support is at 14520.
Sumeet Bagadia, Executive Director, Choice Broking.
The Nifty has been trading with the support of the 100-Day Moving Average, which points out strength in the counter. Furthermore, the benchmark index has confirmed Bullish Harami Candlestick Pattern which suggests an upside movement in the upcoming session. An hourly MACD indicator has given a positive crossover above the zero line, which points to a bullish run in the counter. At present, the Nifty index has support at 14350 levels while an upside resistance comes at 14700 levels.