Domestic equity markets surged higher during the previous session, nearing their all-time highs. S&P BSE Sensex now sits at 55,958 while the NSE Nifty 50 is at 16,624. Broader markets participated in yesterday’s rally, looking to reverse the underperformance of the last few weeks. Entering the third trading session of the week, SGX Nifty was up in the green, hinting at another positive start for domestic equities. Global cues during the early hours of trade were also positive as most Asian Stock markets moved higher, mirroring Wall Street’s overnight gains.
Global watch: On Wall Street, NASDAQ surged 0.52% during the previous trading session followed by S&P 500 and the Dow Jones. Among Asian stock markets, Hang Seng, Shanghai Composite, TOPIX, and Nikkei 225 were trading with gains while KOSPI and KOSDAQ were down in the red.
Technical take: Nifty reclaimed 16,600 during the previous session, forming a small positive candle on the daily chart with minor upper and lower shadow, according to Nagaraj Shetti, Technical Research Analyst, HDFC Securities.”Technically, this pattern indicates an uptrend continuation pattern. Tuesday’s up-move was accompanied by positive overall market breadth and outperformance in the broad market indices like mid-cap and small-cap segments of NSE exchange. This is a positive indication and signals more upside in the short term,” he added.
Levels to watch out: The pull-back rally of the previous two sessions indicates the index is likely to consolidate between 16500 to 16720 levels, said Shrikant Chouhan, Executive Vice President, Equity Technical Research, Kotak Securities. “As long as the index is trading above the 10 day SMA or 16500 level, the uptrend wave is likely to continue up to 16700-16750 levels,” he added. Shrikant Chouhan believes the index is vulnerable below 16500.
FII and DII watch: Foreign Institutional Investors (FII) were net sellers of domestic stock for the sixth consecutive trading session. FIIs pulled out Rs 1,644 crore from domestic markets yesterday. Domestic Institutional Investors (DII) were net buyers, pumping in Rs 2,380 crore.
Gearing up for taper tantrum: India’s chief economic advisor Krishnamurthy V Subramanian has said that the country is well-poised to weather the ripple effect of taper tantrum if the US Federal Reserve begins to scale back its $120-billion-a-month quantitative easing later this year. Subramanian exuded confidence that the government’s elevated market borrowing plan for a second straight year will go on smoothly.
