Tuesday morning’s losses were bought by traders, helping the index recoup all losses and turn green.
Analysts believe the fall in US stocks was too domestic to be mirrored.
After having started the day’s trade in the red, Sensex and Nifty surged once again as they hit fresh all-time highs on Tuesday. S&P BSE Sensex ended at 48,437 while Nifty closed at 14,199, translating to a 534 points intra-day jump for Sensex and 167 points for Nifty. Technically, chartists had said that Nifty would find support at 14,060 which was respected by the index as it reached those levels and sprung back up during the day. Domestic equity markets also ignored yesterday’s sell-off seen on Wall Street that pushed Down Jones and S&P 500 down 1% each.
Tuesday morning’s losses were bought by traders, helping the index recoup all losses. This, analysts say, is backed by the optimism that is keeping bulls alive in the market. “Some selling was seen in the morning but each and every dip in being bought as an opportunity for the traders because the sentiment is positive,” Vinod Nair, Head of Research at Geojit Financial Services told Financial Express Online. He added the news flow around the vaccine is very optimistic as it was not expected this early helping investors stay active. “FII money is still coming in, although domestic institutions are selling,” he added.
Wall Street weakness ignored
Not only India but even other Asian stock markets did not let the weakness in US stock spoil their optimism. “Most Asian markets reversed early losses Tuesday as hopes for the economic outlook outdid worries over a coronavirus surge, new lockdowns, a slow vaccine rollout and uncertainty over US Senate elections,” said Deepak Jasani, Head of Retail Research, HDFC Securities.
The possible reason behind the weakness not hitting Asian markets could be the domestic nature of worries ailing the United States. Vinod Nair said that the political tension in the United States is too domestic to spoil the mood overall. “It will not have an impact that would change the global trend. Money that is there in the market will not be hit in the near term by the election,” he added.
What do the charts say?
Nifty breached 14,200 but ended just shy of the same on Tuesday. “Now index has shifted its base to 14100 zone and overall base is still at 14000 mark holding above said levels a buy on dip structure is still intact, on the other hand index managed to breach 14200 zone decisively its suggest that ongoing move can push index to 14300-14400 zone in near term,” said Rohit Singre, Senior Technical Analyst at LKP Securities.
After today’s closing, Shrikant Chouhan, Executive Vice President, Equity Technical Research at Kotak Securities is suggesting investors to be specific and reduce the cost of investment. “It is a reliable and confident close for the market and based on that we can expect the index to reach the level of 14350/48800 in the near term. Support would be at 14130/48100 and at 14050/47900 levels,” he said.
Although the index is below 14,200, a move past that hurdle could take Nifty 50 to 14,350, according to Manish Hathiramani, Proprietary Index Trader and Technical Analyst, Deen Dayal Investments. “We have a good support at 13950-14000 levels. However, caution is advised and traders should trade on the long side with strict stops,” he added.