A slide in positive global equity and oil prices helped Indian markets end on a strong note today, a day ahead of the Reserve Bank of India’s policy announcement and expiry of the weekly derivatives contract. BSE Sensex It rose 650 points to 58,465, while the broader Nifty 50 index closed 1.15 per cent higher at 17,463, which was lifted by automakers and bank stocks. Broader indices – BSE Midcap and Smallcap – also ended higher in the range of 0.6% to 1.2%.
The Reserve Bank of India (RBI) is expected to keep its repo rate stable but raise its reverse repo rate as part of the process of easing surplus liquidity poured into the markets earlier in the pandemic. Traders will also be looking at RBI’s comment on the inflation outlook and seek details on the government’s plan to support the bond market in absorbing record lending programme.
“If RBI raises the repo rate (and not the reverse repo rate) then the market may take it negatively. In the near term, there may be a range of 17306-17560 for Nifty.
Global markets were mostly up today amid signs of easing tensions between the West and Russia over Ukraine. Oil prices were flat today, after a sharp fall on Tuesday when concerns over a possible increase in supplies from Iran weighed on the market.
Ajit Mishra, VP (Research), Religare Broking Ltd., said, “The calming down of the Russia-Ukraine conflict and the reversal in oil prices have helped turn sentiments around the world.”
US inflation data is also due tomorrow. A strong reading should fuel expectations that the Federal Reserve will raise interest rates next month.
The Nifty Auto index gained among the sub-index, rising 2.2% as top automaker Maruti Suzuki jumped 4.1% to its best closing level since August 2018. Rate-sensitive bank stocks rose 1.5%, with the heavyweight private sector up 2.5%. Lender HDFC Bank.
The short term trend of Nifty has turned upside down after the bullish trend in Tuesday’s candlestick pattern. There is a possibility of further upside towards the level of 17600-17700 in the next few sessions. However, the overall chart pattern shows a possibility of weakness from a lower top formation below the 17800 level. Immediate support is placed at 17350,” said Nagraj Shetty, Technical Research Analyst, HDFC Securities.
Tradingo Founder Partha Nyati said: “Yesterday was a very interesting session as the markets were highly oversold near an important support area and the morning panic removed a lot of weak hands before the second half recovery. Markets have turned light and FIIs have created long positions in the derivatives market, so we saw a good recovery in today’s trading session.”
“Technically, Nifty is giving proper follow-up to the Bullish Hammer candlestick formation formed near the psychological support of 17000. But there are still several resistances like 17500/17650 before the level of 17800. On the downside, 17000-16800 is a close. important base while 17300 will act as an immediate support level.”
bank nifty“A better formation as it manages to close above its 20-DMA after a bullish hammer candlestick formation where 39500 is the next important resistance level while 38200-38000 is the immediate support area,” he said. (with agency input)
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