Dalal Street Corner: Markets witness second straight buying session – what should investors do on Thursday?

The metal and pharma stocks aid the Indian markets most as both the benchmark indices — Sensex and Nifty — closed on a higher note for the second straight day, each up over 1 per cent. The former jumped over 600 points and the latter ended the session above the 16950-level at the close. 

On the contrary, the broader markets outperformed the benchmarks as the mid-cap surged almost 2 per cent and small-cap gained over 2 per cent. While the Nifty Bank, which carries maximum weightage in the Nifty50, has also helped the market, as the banking index jumped 421 points to end above 35000. 

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As many as 42 stocks of Nifty50 advanced and at least 8 scrips declined at the market close. Hindalco became the top gainer, up almost 4 per cent, followed by Tata Motors up over 3.5 per cent. While SBI Life declined most of all, down over 1 per cent, while Wipro, Grasim closed with minor cuts. 

A positive brokerage note leads to a sharp up move in the share price of GMR and Motherson Sumi during Wednesday’s session. India Cements stocks closed over 6 per cent higher as ace investor Radhakishan Damani picks up additional stakes in the company. 

In other market news, a domestic brokerage firm IIFL expects that Divi’s Lab to post a strong set of earnings in the third quarter of the financial year 2021-22, the stock jumped nearly 4 per cent. 

In the IPO segment, Rakesh Jhunjhunwala-backed Metro Brands made a weak start on exchanges, down around 13 per cent, eventually witnessed buying by the end of the session. Similarly, CMS Info Systems initial share-sale is subscribed to 50 per cent of the total issue on the second day of the offer. 

“Domestic market is gaining ground amid a positive rebound in the global market. The rebound was broad-based while mid and small caps outperformed as the bargain opportunity led investors to accumulate the beaten-down stocks, Vinod Nair, Head of Research at Geojit Financial Services said. 

Nair in his post-market comment said, “The Omicron concerns and FII’s selling may keep investors in a cautious mode, it is a time for selective stock picking with a focus on defensive and growth-oriented sectors rather than rushing to the market.” 

The market witnessed the continuation of the strong pullback rally after a big correction that occurred in the market on Monday, Vijay Dhanotiya, Senior Research Analyst at CapitalVia Global Research Limited also said in his post-market comment. 

He added, ‘While sustaining above 16600 is the key factor from a short-term perspective, market research suggests, a decisive breakout above the zone of 16950-17000 could open the gate for a movement till 17400.” 

Dhanotiya retains a cautious stance and advises the traders to refrain from building a fresh buying position until we see further improvement and market sustain above 17000. 

“The markets have closed on a strong footing; however, caution needs to be exercised on the upside. 17150-17200 is a resistance zone for the Nifty50 and until we do not close above that level, the bias is on the downside,” Manish Hathiramani, proprietary index trader and technical analyst, Deen Dayal Investments. 

Rohit Singre, Senior Technical Analyst at LKP Securities said, “Index opened a day with gap and managed to hold its bullish stream throughout the day & closed with gains of more than one percent forming a bullish candle after Doji formation in the previous session which shows positivity.” 

He added, “Index managed to close a day above strong hurdle zone of 16900 now it will act as strong support zone followed by 16800 zone and trading above said levels one can expect a positive moment incoming session so one can use buy on dip strategy near mentioned supports, the immediate hurdle is coming near 17000-17100 zone.”