Dalal Street Corner: Markets halt after three-day rally; what should investors do on Monday?

After a three-day rally, the Indian markets on Friday recovered almost all their losses to close flat with negative bias. The Sensex slipped marginally by 20 points and the Nifty50 closed above the key level of 17500-mark, led by the metal and auto stocks.  

The broader markets outperformed the benchmark indices to positive with both mid and small-cap each gained almost 1 per cent at the market close. Nifty Bank also recovered all its losses to end positive up 23 points or 0.06 per cent to 37105, led by SBI and ICICI Bank.  

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As many as 22 advanced, 26 declined and 2 remained unchanged on the Nifty50 at the market close. Asian Paints surged most of all by over 3 per cent, followed by Grasim up over 1.5 per cent. On the contrary, Rakesh Jhunjhunwala’s favourite stocks Titan declined most by around 2 per cent at close. 

In the IPO segment, as many as three initial public offers — Shriram Properties, MyMapIndia and Metro Brands. It’s the last day for the first IPO subscribed by 4.54 times, while the second IPO has been subscribed 4.84 per cent on Day 2, while the third, which is launched today, booked 24 per cent. 

Shrikant Chouhan, Head of Equity Research (Retail), Kotak Securities Ltd said, “Domestic equities gave positive returns this week amid easing concerns pertaining to the potential severity of the Omicron covid variant. The majority of the sectoral indices saw positive returns.” 

RBI’s monetary policy committee unanimously kept the repo rate unchanged at 4 per cent along with an accommodative stance, the market analyst said in post market comment on Friday. 

Chouhan further added, “Markets in the immediate term will keenly watch out for the actions on asset tapering and key policy rates in the upcoming US Federal Reserve meet. So far this month, FII continues to be a net seller in the Indian market,” 

Vinod Nair, Head of Research at Geojit Financial Services said, “Indian benchmark indices traded with cuts to close flat following weak sentiments in the global market as the market awaits the release of Indian and US November inflation numbers.” 

According to Nair, “Losses in financial and IT sectors pressurised indices lower while positive realty, auto and metal stocks helped in erasing losses along with strong support from mid and small caps.” 

Asian and European indices were trading weak ahead of the US inflation data release as the market expects inflation levels to remain elevated, the fundamental analyst said in post market comment. 

Chandan Taparia Vice President | Analyst-Derivatives Motilal Oswal Financial Services Limited also pointed out, “Nifty traded within yesterday’s range and finally closed on a flattish note with marginal losses of 5 points. It formed an Inside Bar and a small bodied Bullish candle on daily scale.” 

“On the weekly frame, it formed a Bullish candle and negated its lower lows of the last three weeks. Now it has to hold above 17500 for an up move towards 17600 and 17777 zones whereas on the downside, support is intact at 17350 and 17200 zones,” Taparia also mentioned. 

“On the technical front, the Index has been rising gradually for the last three days which suggests strength for an upside in the index. Furthermore, the index has given closing above 21&9 HMA, which suggests a northward direction in the counter”, Sachin Gupta, AVP-Research, Choice Broking. 

Gupta in his post-market comment said, “A daily momentum indicator MACD & Stochastic is trading with a positive crossover which suggests upside momentum in the upcoming session. At present, the Index has support at 17300 levels while resistance comes at 17600 levels.”