Dalal Street Corner: Buying sentiment continues for second day in a row; what should investors do on Wednesday?

The Indian markets on Tuesday rose for the second straight day amid positive global cues and high buying sentiment. The Nifty50 has reported over 450 points surge in two sessions to end above 17,800 since October 28, 2021. 

While the other benchmark index BSE Sensex gained over 672 points to end at almost 145 points away from the 60000-mark. Similarly, the Nifty Bank too reported a rally for second consecutive session up 418 points to 36840-level at the market close. 

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In the broader markets, midcap index closed 82 points higher after a brief bout in the red in intraday trade, while small cap settled over 0.3 per cent also with marginal gains. The market breadth remains in favour of advances with advance-decline ratio at 4:3. 

As many as 35 stocks closed in the green, in which four of five top gainers are public sector units as NTPC grew most by over 5 per cent, followed by ONGC up almost 4 per cent, SBI and Power Grid each up almost 3 per cent. RIL closed as 5th top gainer up over 2 per cent at the close. 

On the contrary, 15 stock on Nifty50 closed in the red, in which Tata Motors slumped most by almost 2 per cent amid CLSA re-rating report, followed by Coal India, Tata Consumer, Sun Pharma and Shree Cement each down between 1-1.5 per cent at the market close. 

Fast moving consumer goods major Marico ends off lows but pre-Q3 update keeps the stock in red, down 2 per cent in otherwise positive market. Small-cap stock IRCON rises in trade over 2 per cent after emerging lowest bidder for NHAI project worth Rs 861 crore.  

Except metal, pharma and realty all sectoral indices closed in the green, with Nifty Bank and Financials surging most by over 1 per cent each the close. 

Rohit Singre, Senior Technical Analyst at LKP Securities said, “Strong move has been witnessed in Nifty as it managed to close a day at 17806 with gains of more than one percent and formed a bullish candle for the third consecutive session.” 

He added, “The index has formed a base near 17700-17600 zone on immediate basis holding above said support zone and some more extension in current pullback seen towards 18000 mark, on the higher side immediate hurdle is near 17900-18000 mark also overall structure looks buy on dip.” 

“Tracking strong momentum of global peers, domestic bourses witnessed a smooth sail, steered by index heavyweights and gains in financials & consumer durables,” Vinod Nair, Head of Research at Geojit Financial Services said in his post market comment on Tuesday. 

He added, “Despite surging covid cases, investor sentiments remain positive globally as reports suggest lower impact of the new variant on economic recovery. However, India’s unemployment rate rose to 7.9 per cent in December as compared to 7 per cent in November owing to muted economic activity in rural and urban India amid rise in Omicron cases.” 

“We have achieved the 17800-17850 target for the index! There might be some level of resistance between 17800-17950, but eventually the market might want to scale higher to 18050-18100,” Manish Hathiramani, proprietary index trader and technical analyst, Deen Dayal Investments said.