Sensex, Nifty soar 2.5% in broad-based rally; here’s what fuelled today’s Dalal Street rally | The Financial Express

Sensex, Nifty soar 2.5% in broad-based rally; here’s what fuelled today’s Dalal Street rally

Analysts say that currently markets are at premium valuations, and continued support from foreign investors has aided domestic stocks to inch higher.

Sensex, Nifty soar 2.5% in broad-based rally; here’s what fuelled today’s Dalal Street rally
On the technical front, the Nifty has formed an Open Bullish Marubozu candle on a daily time frame which suggests strength in the counter. Image: Reuters

BSE Sensex and NSE Nifty 50 rallied more than 2.5 per cent, each on Tuesday on the back of healthy buying in banking stocks. S&P BSE Sensex soared 1,564 points or 2.7 per cent to settle at 59,537. NSE Nifty 50 finished trade at 17,759, up 446 points or 2.6 per cent. Index heavyweights such as ICICI Bank, HDFC Bank, Reliance Industries Ltd (RIL) contributed the most to the indices gain. BSE Midcap and smallcap indices also participated in the rally. S&P BSE Midcap index jumped 2 per cent or 491 points to end at 25,408, while S&P BSE Smallcap added 1.4 per cent or 396 points to settle at 28,651. Analysts say that currently markets are at premium valuations, and continued support from foreign investors has aided domestic stocks to inch higher.

Vinod Nair, Head of Research, Geojit Financial Services

Today’s rebound indicates the domestic economy’s resilience in comparison to its global peers. Although the markets are currently at premium valuations, continued support from foreign investors aided domestic stocks to inch higher. Sectors in swing with the progress of the domestic economy should be able to do well compared to the rest.

Ajit Mishra, VP – Research, Religare Broking

Markets made a remarkable recovery and gained over two and a half percent amid mixed global cues. After the gap-up start, the benchmark moved from strength to strength till the end and settled around the day’s high. All the sectoral indices participated in the move wherein banking and financials contributed the maximum. In line with the trend, the market breadth was also inclined strongly on the advancing side. Markets have completely engulfed the recent decline with a decisive up move however sustainability would be critical for a further uptick. While the global cues are still mixed, upcoming domestic data like core sector and auto sales numbers will be on the radar for cues. We recommend maintaining a positive yet cautious stance and suggest preferring top-performing sectors like banking, financials, auto, FMCG and realty for long positions. 

Also read: Indian equities to remain under pressure in near term; add largecap banks, auto, realty stocks

Deepak Jasani, Head of Retail Research, HDFC Securities

Nifty has nullified the bearish signals from the downgap created on the previous day and has filled that downgap. It has closed at the highest ever on monthly charts. It will now face resistance at the 17965-17992 band while the 17522-17623 band could offer support.

Rupak De, Senior Technical Analyst, LKP Securities

Bulls had a grand return as the benchmark index clocked a 2.5% rally on Tuesday following a gap-down closing in the previous session. A strong rally took the index above the recent consolidation sending the 50 EMA above 200 DMA. The RSI on the other hand is still in a bearish crossover.  The trend after today’s massive movement looks positive. Over the short term, the index may move towards 18000-18100. On the lower end, support is visible at 17500.

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Palak Kothari, Senior Technical Analyst, Choice Broking

On the technical front, the Nifty has formed an Open Bullish Marubozu candle on a daily time frame which suggests strength in the counter. Furthermore, Nifty has given a breakout of its previous resistance level i.e., 17730 level, and given closing above the same suggests a bull run. Nifty has given closing above 21-DMA which adds strength to the upside. On the OI Data, On the call side, the highest was witnessed at 18000 followed by 17900 while on the put side was at 17500 level. The momentum indicator stochastic was bounced from the oversold zone and traded and about to give positive crossover on a daily time frame which suggests strength in the counter. The support for Nifty has shifted around 17500 levels while on the upside 17900 may act as an immediate hurdle. On the other hand, Bank Nifty has support at 38500 levels while resistance at 40000 levels. Overall, the index is looking strong for the upcoming session crossing above 17900 can show an 18000-18150 level. Investors can take an approach to buy on dips.

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First published on: 30-08-2022 at 16:24 IST