The benchmark equity indices ended Thursday’s trading session in the green with the help of PSU Bank and Realty stocks. After a volatile start, there was a sharp rebound across the markets taking the Nifty well past the key resistance zone around 19,650 and the Index finally closed at 19,727.05, while the BSE Sensex added 385.04 points to settle at 66,265.56.
The Bank Nifty showed a trend reversal and climbed 1.06% to 44,878.35. The broader indices traded largely in the green. The gains were led by realty, PSU Bank and media stocks while the FMCG, pharma stocks saw some correction.
The relative volatility in the market remained higher and the VIX closed up 1.82%. Interestingly it was a new closing low for the rupee in domestic trade.
Commenting on today’s session, Vinod Nair, Head of Research, Geojit Financial Services said that, “The domestic market initially opened with a lackluster performance, influenced by weak global cues. However, as the day progressed, a decline in US bond yields and crude oil prices injected some positivity into the market. This optimism was most prominent in banking stocks. Interestingly, mid- and small-cap stocks managed to retain investor interest even though their valuations are relatively high. Nonetheless, the persistently weak trade data from China continues to cast a shadow over the global market’s outlook.”
Technical outlook
“Technically, the Nifty successfully cleared the short term resistance of 19,650 and post breakout it intensified the positive momentum. Higher bottom formation on intraday charts and bullish candle on daily charts supports further uptrend from the current levels. We are of the view that, 19,650 would be the key level to watch out for, and above the same the index could move up till 19,800 -19,825. On the flip side, below 19,650, the uptrend would be vulnerable,” said Shrikant Chouhan, Head of Research (Retail), Kotak Securities.
Bank Nifty hurdle seen at 45,000
“Bank Nifty has broken out of a three-day consolidation on the upside which indicates that it has started the next leg of up-move. Daily and hourly momentum indicators are in sync with the price action which should provide speed to the present up-move. On the upside 45,000 is the psychological hurdle and above that 45,200 shall be the next possible hurdle. Overall, the trend is positive, and any intraday dips should be bought into,” Jatin Gedia – Technical Research Analyst at Sharekhan by BNP Paribas
Currency outlook
The Indian rupee experienced a sharp correction due to the rising US dollar and the continued rally in crude oil prices, closing at 83.29.
“The weaker neighbour currencies and crude oil prices weighed on the rupee. On a closing basis, the local rupee settled at its lowest level. The probable central bank’s intervention limited the fall in the rupee in today’s trade. However, the trend remains bearish for the rupee amid broad-based strength in the greenback against all major trading partners.Spot USDINR is expected to break the life of 83.29 and head towards 83.50 and 83.70 while may protect level of 82.90, in the coming days,” said Dilip Parmar, Research Analyst, HDFC Securities.