Dalal Street Corner: Markets end positive after gap-down opening; what should investors do on Tuesday?

After a gap-down opening, the Indian markets closed on a higher note during Monday’s session as the Sensex gained around 300 points and the Nifty50 above key sentimental level of the 17000-mark.  

The surge in the market is led by pharma stocks as Prime Minister Narendra Modi announced precaution dose for frontline workers, healthcare workers and senior citizens with comorbidities. 

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Besides pharma, other stocks such as banking and financial as well as information and technology stocks to aided to the markets rally on Monday. 

Following the benchmarks suite, even the broader markets closed positive as mid-cap closed nearly 0.5 per cent and small cap up marginally 0.2 per cent. While Nifty Bank closed 223 points or 0.64 per cent to 35080-level, led by private lenders such as ICICI Bank and Kotak Mahindra Bank. 

Of 50 scrips on the Nifty, 39 advanced and 11 declined at the close. Tech Mahindra continued to be at the top position, up around 3.5 per cent, followed by Cipla, Dr Reddy’s each up over 2 per cent. While Hindalco declined most by nearly 1.5 per cent, followed by ONGC down over 1 per cent. 

In IPO segment, HP Adhesives Limited shares made a decent debut on the exchanges at over 16 per cent premium to Rs 319 per share on the BSE as compared to the issue price at the upper end of Rs 274 per share. While it made a debut at Rs 315 apiece, a gain of 14.96 per cent on the NSE.  

Vijay Dhanotiya, Senior Research Analyst at CapitalVia Global Research Limited said, “The market witnessed some positive movement after a negative start and an attempt to hold the level above the Nifty 50 Index level of 17000.” 

He added, “Market research suggests that sustaining above 17000 will be an important level for the market to stay positive in the short term. If the market able to sustain 17000-level, a positive momentum in the market can be witnessed which can lead to the higher levels near 17400.” 

“On the technical front, the index has confirmed Hammer kind of candle on an Hourly chart which suggests strength for upside in the counter. And, it has been trading above 21&50-HMA which suggests strength in the counter,” Palak Kothari Research Associate Choice Broking said. 

Kothari added, “A momentum indicator STOCHASTIC trading with a positive crossover on the daily time-frame. At present, the Index has support at 16800 and resistance at 17180, crossing above the same can show 17300-17400 levels. Bank Nifty support at 34200 and resistance at 35500 levels.” 

Similarly, Vinod Nair, Head of Research at Geojit Financial Services said, “Despite spiking covid cases globally, the domestic market took a rebound post its weak opening factoring the low mortality rate of the new variant. Gains in pharma, IT and finance were the major sectorial contributors to the market recovery.” 

“Asian markets traded mixed backed by a pledge of support measures from the Chinese central bank while the US and European indices traded flat amid wounded risk sentiments owing to rocketing omicron cases,” Nair added in his post market comment on Monday. 

"The Nifty50 not been able to close above the resistance of 17200-17300, until that doesn’t happen, we cannot rule out a U-turn from the current juncture,” Manish Hathiramani, proprietary index trader and technical analyst, Deen Dayal Investments said in his post market comment. 

Hathiramani further said, “If we get past that resistance patch, we can summarize that the short-term weakness has been done with and we are resuming the long-term uptrend.”