Dalal Street Corner: Metal, oil & gas power Nifty to close above crucial support of 16,600; what should investors do on Wednesday?

Amid global turmoil in the view of Russia-Ukraine war, metal and oil & gas powered the domestic equity market to close higher for the second consecutive day despite opening more than 1 per cent lower on Monday as Nifty held on to crucial support of 16,600. Nifty Metal index surged as much as 4.95%, followed by oil & gas which gained 2.6%, while consumer durables surged 1.5% and Nifty IT over 1%.  

Hindalco, JSW Steel and Tata Steel led the metal index as the stocks gained up to more than 7 per cent. Similarly, BPCL, Power Grid, Reliance Industries were lead oi & gas stocks. 

"Metal stocks rallied on hopes that curtailing Russian exports would help Indian steelmakers to capture the export market share," said Vinod Nair, Head of Research at Geojit Financial Services.  

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Banknifty witnessed a negative move, closing at 36205.30 levels with 0.6% losses as mid cap index gained nearly 1 per cent and small cap closed higher by over 0.50%. 

Oil price continue to rise

Meanwhile, Oil prices jumped on Monday as Western allies imposed more sanctions on Russia and blocked some Russian banks from a global payments system, which could cause severe disruption to its oil exports, said a Reuters report.  

Brent crude rose $4.16, or 4.3%, to $102.09, at 0915 after hitting a high of $105.07 a barrel in early trade. 

"The sanctions on Russian financial institutions, such as the exclusion from the international payment system, likely complicate and slow trade. There is already evidence reported that buyers in parts shun Russian oil partly because of the uncertainties related to payment and insurance of such cargoes. Slower flows of Russian oil mean more pressure on supplies from other sources," said Norbert Rücker, Head Economics and Next Generation Research, Julius Baer. 

Rücker said all eyes will be on the petro-nations and to what extent are they willing to ease supply concerns and tame prices by ending their production curbs. "The near-term outlook remains highly clouded and uncertain," he added. 

The rupee too slipped by 2 paise to 75.35 (provisional) against the US dollar on Monday due to rising crude oil prices amid deepening tensions between Russia and Ukraine. 

As volatility continues to drive market amid Russia-Ukraine conflict, we have collated views of market experts and analysts who decode the current trend and suggest what should be investors looking at going forward.   

Rupak De, Senior Technical Analyst at LKP Securities.  

The recovery continues in Nifty as 16,550 level was not broken decisively. On the higher end, the index value crossed beyond the initial resistance of 16,750. The momentum may continue till 16930-17000, where once again, the Nifty may face selling pressure. On the lower end, support lies at 16750/16600" 

Sachin Gupta, AVP, Research, Choice Broking 

Technically, the nifty index has formed a long green candle and sustained above the Lower Bollinger Band formation, but is still trading below the 200-Days SMA. Moreover, on an hourly chart, the index shifted above 21-SMA, which suggests further recovery. A momentum indicator RSI has pulled up from the oversold zone & Stochastic witnessed a positive crossover, which indicates short covering for the near term. At present, Nifty has immediate support around 16650/16500 levels, while the upside the resistance around 17000 levels. On the other hand, Bank nifty has support at 35500 levels and resistance at 36800 levels. 

Vinod Nair, Head of Research at Geojit Financial Services  

"Aggravated Russia-Ukraine conflict along with fresh sanctions on Russia by global powers weighed on Western markets. Despite opening on a negative tone, domestic indices staged a strong recovery lifted by metal stocks and positive Asian markets. Metal stocks rallied on hopes that curtailing Russian exports would help Indian steelmakers to capture the export market share. Domestic investors are keenly awaiting the release of the Q3 GDP data later today which is forecasted at 6.5% against 8.4% in Q2" 

Vijay Dhanotiya, Lead of Technical Research at CapitalVia Global Research Limited 

The market witnessed a strong pullback rally after a big correction. While sustaining above 16,600 is the key factor from a short-term perspective, our research suggest, a decisive breakout above the zone of 16,800 could open the gate for a movement till 17,200. Technical Indicators suggest a volatile movement in the market. 

(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.)