Nifty, Sensex rally for 5th straight day; ‘market volatility to persist, buy value stocks on dips’

Bulls managed to come out on top in a highly volatile session on Thursday. Benchmark indices ended higher for fifth day in a row with Nifty settling above 16600.

Nifty, Sensex rally for 5th straight day; ‘market volatility to persist, buy value stocks on dips’
Market volatility is likely to remain high in near-term with index heavyweights like Reliance, UltraTech, LIC, Infosys, announcing their Q1 earnings

Bulls managed to come out on top in a highly volatile session on Thursday. Benchmark indices ended higher for fifth day in a row with Nifty settling above 16600. At close, the Sensex was up 284.42 points or 0.51% at 55,681.95, and the Nifty was up 84.50 points or 0.51% at 16,605.30. On the sectoral front, except pharma, all indices ended in the green, with PSU Bank, Oil & Gas, Power and Capital Goods indices rose 1-2%. In broader markets, BSE midcap index added 1.2% and Smallcap index jumped 0.9%. According to analysts, market volatility is likely to remain high in near-term with index heavyweights like Reliance, UltraTech, LIC, Infosys, announcing their Q1 earnings. Investors should focus on buying quality stocks on dips, they said.

Vinod Nair, Head of Research at Geojit Financial Services

“With support from FII buying, the domestic market was able to withstand the downward pressure from global markets to close on a positive note. Global indices traded lower on rate hike worries as ECB in its meeting today, is expected to raise rates by 50bps, while the Fed is expected to increase rates by 75bps in upcoming meeting scheduled next week. Even though a rate hike of this magnitude has already been factored in, the major market driver would be their commentary on future inflation and growth forecasts.”

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

“Investors traded with cautious optimism as gains in oil & gas, power, realty & banking stocks helped markets extend gain for the 5th straight session. The return of FIIs into domestic equity markets in the last few sessions coupled with receding commodity prices and hopes that US Fed may not go for aggressive rate hikes in its next meeting has somewhat tempered the fears of investors. Technically, on daily charts, the Nifty has formed a bullish candle and closed above the 100-day SMA (Simple Moving Average), which is broadly positive. For traders, 16500 would act as a key support level and above which the index could move up to 16700-16750. On the flip side, strong possibility of a quick short term correction is not ruled out, if the index trades below 16500. Below the same, the index could slip till 16450-16420.”

Palak Kothari, Senior Technical Analyst, Choice Broking

“On a weekly expiry day, Nifty index has a volatile session after a flat opening index made an intraday low at 16483.90 level but showed bounce back and managed to close at 16605.25 level with a gain of 84.40 points. However, Bank nifty closed the session at 36201 level with gain of 228.90 points. On the technical front, Nifty has formed a bullish candle with support of 100 DEMA which suggests strength for upside. Nifty has been trading above the falling trendline and formed a strong base around 16500 levels which suggest a northward journey in the counter. Nifty may find support around 16500 levels while on the upside 16800 may act as an immediate hurdle. On the other hand, Bank nifty has support at 35500 levels while resistance at 36900 levels. Overall, Index has formed good support around 16500 level while crossing above 16800 level can show upside rally.”

Ajit Mishra, VP – Research, Religare Broking Ltd

“Markets managed to gain half a percent amid volatility on a weekly expiry day. The benchmark remained range bound for most of the day and finally settled around the day’s high. Meanwhile, healthy buying in banks, metals, & FMCG pack and buoyancy on the broader front kept the participants busy. Consequently, the Nifty closed at 16,580 levels; up by 0.5%. We maintain our cautiously optimistic stance and expect volatility to remain high, with more Nifty heavyweights like Reliance, UltraTech, and Infosys, announcing their earnings in the following sessions. Meanwhile, there’ll be no shortage of trading opportunities and participants should focus more on buying quality stocks from the sectors, which are trading in sync with the benchmark.”

Deepak Jasani, Head of Retail Research, HDFC Securities

“Nifty has overcome the cautious signs of July 20 (close lower than open) and marched ahead. There are no reversal signals as of now though the uptrend is close to becoming overbought from a near term perspective. Nifty could remain in the 16484-16695 band for the near term.”

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