Nifty, Sensex end higher for second straight day, volatility to persist; Metals, PSUs may underperform

Indian benchmark indices traded within a narrow range on Friday, tracking positive global cues. The S&P BSE Sensex closed 462 points, or 0.88 per cent higher at 52,728. The Nifty50, meanwhile, ended at 15,699, up 143 points or 0.92 per cent.

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Equity markets in the near term are expected to continue reacting to news related to inflation, monetary policy and commodity price movement.

Indian benchmark indices traded within a narrow range on Friday, tracking positive global cues. The S&P BSE Sensex closed 462 points, or 0.88 per cent higher at 52,728. The Nifty50, meanwhile, ended at 15,699, up 143 points or 0.92 per cent. Auto, banking, and FMCG stocks were in focus as easing commodity prices eased input cost and credit off-take pressures. M&M, IndusInd Bank, Bajaj Finance, Hero MotoCorp, HUL, ICICI Bank, Britannia Industries, ONGC were the top Nifty gainers. On the downside, Tech M, Infosys, Apollo Hospitals, TCS, NTPC, HCL Tech, and Coal India ended as top laggards. Meanwhile, in the broader market, the Nifty MidCap and SmallCap indices advanced 1.4 per cent and 1.76 per cent, respectively.

Shrikant Chouhan, Head of Equity Research (Retail) at Kotak Securities

“Post correction over past couple of weeks, equity markets ended this week with positive returns. Major key indices and most sectoral indices gained during the week. Auto sector led the recovery amid softening in commodity prices. On the other hand, BSE Metal, BSE Energy and BSE Oil & Gas indices underperformed the broader markets. Correction in crude oil prices from recent peak and softening in commodity prices offered some relief to the markets in an otherwise high global inflation environment. Monsoon progress is an important factor to watch as good monsoon would calm concerns with respect to food inflation. Equity markets in the near term are expected to continue reacting to news related to inflation, monetary policy and commodity price movement.”

Ajit Mishra, VP – Research, Religare Broking Ltd

“Markets are witnessing consolidation after the sharp decline and awaiting some fresh triggers. Since we don’t have any major domestic events, global updates viz. market performance, crude movement and easing of the geopolitical situation will remain on the participants’ radar. We like auto, FMCG and pharma for long trades while metals and PSU banks may continue to underperform. We recommend maintaining sector/stock-specific approach and aligning the positions accordingly.”

Amol Athawale, Deputy Vice President – Technical Research, Kotak Securities Ltd

“Benchmark Sensex & Nifty joined the global rally and logged impressive gains following the recent rout, as falling commodity prices and a steady fall in crude prices bolstered sentiment. Also, valuations have become attractive after the recent selloff, which prompted investors to buy beaten-down stocks of metal, oil & gas, banking and power sectors. Technically, on weekly charts the Nifty has formed a long bullish candle which is broadly positive. On daily and intraday charts, the market is holding a higher bottom formation that also supports short term uptrend. For the bulls 15700-15750 would act as a key resistance level, while on the flip side 15500 and 15400 could be strong support zones for the short term traders. Above 15750, the index could move up to 15850-15925. On the other side, a fresh round of selling is possible only after 15400 and below the same it could retest the level of 15250-15150.”

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