Dalal Street Corner: Nifty, Sensex gain over 4% in holiday-shortened week; what should investors do on Monday?

The Indian markets ended more than 4% higher for the week ended March 17. In the holiday-shortened week, the benchmarks Nifty 50 and the Sensex settled with 4.2% and 4.3% gains respectively on Thursday amid positive global cues and softening oil prices.   

Despite 25-basis points hike by the US Federal Reserve, the headline indices settled with 1.84% gains each on Thursday. The Nifty50 ended just shy of 17,300 at 17,287.05 and the Sensex added 1047 points to close at 57,864. It was also supported by Foreign Institutional Investors (FIIs), which turned buyers after a long time.  

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The rally was led by auto, financial services and consumer durables, which ended with more than 2% gains, while Nifty realty surged the most with over 3% gains. Nifty IT was the only index to close in the red.  

In the broader market, Nifty midcap and small cap indices gained 1.3% and 1.2% respectively.  

Experts were of the view that markets may continue to rally amid volatility and investors can take this opportunity to increase allocation in equities for long-term.  

We have collated views of market experts who speak about the trends on Thursday and explain how market would behave going forward.  

Vinod Nair, Head of Research at Geojit Financial Services  

Global markets welcomed the fed decision to hike rates by 25bps as it was on expected lines. However, the Fed’s projection of another six hikes during the year is hawkish.  

FIIs turning net buyers after a long wait was also a relief for the domestic market. With crude prices receding, war tensions calming down and foreign investors back to buying, we can expect the rally in the domestic market to continue. 

S Ranganathan, Head of Research at LKP securities. 

Positive Global Cues post the Fed rate hike, softening oil prices and progress in Russia- Ukraine talks boosted the confidence of the bulls as benchmark indices were up over 2% in afternoon trade.  

With the Volatility Index cooling off considerably today, the broader markets too displayed optimism as several Tata Group companies posted 52-week highs today reminding one of the famous Philip Fisher's words - It is often easier to tell what will happen to the price of a stock than how much time will elapse before it happens 

Narendra Solanki, Head- Equity Research (Fundamental), Anand Rathi Shares & Stock Brokers  

Indian markets opened on a positive note tracking upbeat Asian market cues as investors reacted to the Fed hike. During the afternoon session the markets traded firm on account of buying in front line counters.  

FPIs turning buyers after a long time and softness in crude also supported the markets. Adding to the optimism, traders cheered Minister of State for Commerce and Industry's statement that the bilateral trade in goods is projected to increase from the current $60 billion to $100 billion annually within five years of the implementation of the India-UAE free trade agreement. 

Nishit Master, Portfolio Manager, Axis Securities  

We believe that more than the rate hike trajectory indicated by the Fed, it is crucial to keep an eye on the proposed reduction in the Balance sheet by the US Fed (QT), which is expected to start from the next meeting. This tightening of liquidity can add volatility to the markets and lower PE multiples. We, thus, believe that despite the recent rally, the markets will continue to remain volatile in the near future on the back of tightening of liquidity conditions globally. One should use this volatility to increase equity allocation for the long-term. 

(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.)