Dalal Street Corner: Market extends gains to 2nd day ahead of state election results tomorrow; what should investors do on Thursday?

A day ahead of state election results of five states on March 10, the Indian markets ended higher anticipating results in line with the exit polls.  Benchmarks Nifty50 and the Sensex ended 2.07% and 2.29% higher as 40 shares advanced on the former and 25 settled in the green on the latter as market cap of BSE listed companies surged by nearly 5 lakh crore in the last two positive closings.  

Mirroring benchmarks, midcap and small cap index too gained more than 2% each.  

On sectoral front Nifty Bank gained nearly 2% to close above 33,800. Realty, auto, FMCG, financial services, media, Pharma were among top gainers as metal declined.  

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Asian Paints, Reliance Industries, Bajaj Finance, Mahindra & Mahindra, Bajaj Finserv and HDFC Bank were among top gainers, while Shree Cement, ONGC, Power Grid, NTPC, Coal India and Tata Steel declined the most.  

Analysts credit this recovery to several factors, including exit polls, attractive valuations and reports of Ukrainian President pushing no longer for Nato membership.  

We have collated views of analysts and experts who explain the current trend in the market and give insight into how the market would behave going forward.  

S Ranganathan, Head of Research at LKP securities 

D-Street Bulls finally held the upper hand today on reports suggesting that the Ukrainian President is no longer pressing for NATO membership. With Covid behind, short-covering coupled with the Exit Poll results buoyed the bulls as benchmark indices rose almost 3% in late afternoon trade with major sectoral indices ending in the Green.

Domestic Investors who have reposed faith in the GOI policies amidst the turmoil and volatility would be keenly watching the impact of rising oil & commodity prices on Inflation and corporate earnings. 

Vinod Nair, Head of Research at Geojit Financial Services  

Domestic indices carried forward yesterday’s gains following a clawback in European markets and US futures as smart investors saw value in the current market valuations. Dip buying is noticed in heavyweights, defensives like IT & Pharma, and value buying in Pvt banks.

Oil prices continued to rise after the US banned Russian oil imports. The domestic market is also reacting positively to exit polls and in anticipation of in-line state election results. In the near term, the domestic market will trade as per the positive or negative surprise in the state election results and global trend.

Santosh Meena, Head of Research, Swastika Investmart Ltd 

Indian market witnessed a strong bounceback today following a smart recovery of yesterday's trading session. We started to outperform after the exit poll of the UP election whereas global markets also started to recover on the back of some positive news flows on the Russia-Ukraine front. Crude oil prices also started to cool off from the $131 level despite the US banning Russian crude oil.  

Things on the Russia-Ukraine front are still uncertain therefore the market will remain volatile and vulnerable for selling pressure until tension completely eases out whereas we will have US inflation numbers tomorrow that is likely to come at a five-decade high.  

On the domestic front, the outcome of the UP election will be an important event for the market, however, it will have an impact for only 1-2 days. 

Technically, the market witnessed a bounceback from the oversold territory where Nifty gave follow up of bullish engulfing candlestick pattern however 16400 is a critical hurdle and Nifty has to sustain above 16400 level to gain further strength for a move towards next important hurdle 16800. On the downside, 16200 will be immediate support while 15900 will be the next important support. 

(Disclaimer: The views/suggestions/advice expressed here in this article are solely by investment experts. Zee Business suggests its readers to consult with their investment advisers before making any financial decision.)

Mohit Nigam, Head - PMS, Hem Securities for Wed March 9 

Even though oil prices surged due to a US import embargo on Russian oil, Indian benchmark indices were off to a strong start today. Buying was seen across the BSE sectoral front, with stocks from the Energy, TECK, and IT counters attracting the most attention.  

The general market breadth is in favor of increase today. European markets rebounded as buyers bought stocks that had been battered in the recent market selloff. After Ukrainian President Zelenskyy announced the country was no longer interested in NATO membership, investors bought beaten-down shares in the hopes of de-escalating the Russia-Ukraine war. 

Net domestic positive flows are currently sustaining the enormous withdrawals observed by FIIs on a daily basis. The robust SIP flow of 11k crore monthly, which continues to expand, accounts for a substantial portion of the positive flows. 

On the technical front, immediate support and resistance in Nifty 50 are 16100 and 16500 respectively. Bank Nifty immediate support and resistance are 33200 and 34500 respectively. 

Sachin Gupta AVP, Research Choice Broking 

On a daily chart, the index has confirmed the Bullish Engulfing breakout, which suggests further bounce for the near term. Moreover, the index also took support at Lower Bollinger Band and moved above it. On an hourly chart, the index has formed a rounding bottom and witnessed a positive crossover in RSI & Stochastic.  

At present, the index has support at 16200/16000 levels while resistance comes at 16770 levels. On the other hand, Bank nifty has support at 33200 levels while resistance at 34500 levels. 

Chandan Taparia, Vice President, Analyst-Derivatives, Motilal Oswal   

The Nifty index opened positively and a sharp recovery was seen towards 16400 zones led by a short covering move. It turned from its oversold territory and closed with gains of around 330 points.  

It formed a Bullish candle on a daily scale and negated its lower lows formation of the last four sessions. Now it has to hold above 16350 zones, for an up move towards 16666 and 16800 zones whereas support exists at 16161 and 15950 zones. 

(Disclaimer: The views/suggestions/advice expressed here in this article are solely by investment experts. Zee Business suggests its readers to consult with their investment advisers before making any financial decision.)