Dalal Street Corner: Sensex, Nifty snap four-day fall, end up almost 1%; what should investors do on Wednesday?

Last-hour surge aided the Indian markets to snap four-day losing streak during Tuesday’s session. The banking and financials lead the recovery, as Nifty Bank soared over 1,000 points from lows. The benchmark indices – Sensex and Nifty50 – rose 1,163 and 342 points, respectively from day’s low.  

In stock specific action, ONGC became top Nifty loser despite crude holding on to gains, while JK Cement top midcap loser, down 18 per cent in two sessions amid paint business entry news. Similarly, aluminium price fall dragged Hindalco, Vedanta and NALCO stocks. 

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India VIX fell by 2.53 per cent from 29.33 to 28.58 levels. Now volatility needs to further cool down to 25-24 for stability in the market. 

Due to a severe fall of the Indian Rupee vs the US dollar, investors sought a safer refuge in the sector, and shares of information technology (IT) in an otherwise weak market, the market expert Mohit Nigam says in post-market comment.  

He added, gold futures rose on the MCX, boosted by the bullion's safe-haven appeal amid the Ukraine-Russia conflict and supply-chain disruptions caused by sanctions placed on Russia by Western countries. 

Major western markets were also trading in the green while other Asian peers continued to trade in negative territory on fear of the impact of global inflationary pressure due to the ban on Russia’s oil export, another market expert Vinod Nair said in his post market comment. 

We have collated views from different experts as to what investors should do when trading resumes: 

Expert: Vinod Nair, Head of Research at Geojit Financial Services.  

Domestic indices reversed their trend led by export-oriented sectors like Pharma and IT which saw buying interest as the rupee fell to its record lows. Favorable exit poll results of state election and low-level buying seen in mid and small caps helped in adding optimism in the domestic market.  

Expert: Chandan Taparia Vice President | Analyst-Derivatives Motilal Oswal Financial Services  

Buying interest emerged in the last couple of hours and it closed above 16000 with gains of around 150 points. Nifty formed a Bullish Engulfing pattern on daily scale and negated its lower highs formation of the last three sessions. Now, it has to hold above 15950 zones, for an up move towards 16161 and 16350 zones whereas support exists at 15800 and 15650 zones. 

Expert: Rupak De, Senior Technical Analyst at LKP Securities. 

Markets witnessed a spectacular recovery as Nifty50 closed over 300 off days low. On the daily chart, a bullish engulfing pattern has formed which suggests short term positive reversal. On the higher end, the index may move towards 16200/16400 over the short term. On the lower end, 15800 is likely to act as support. 

Expert: Mohit Nigam, Head – PMS, HEM Securities 

Indian equities have declined less than overseas markets because domestic institutions and retail investors have offered support at a time when foreign investors have been selling. Investors should consider buying equities for medium to long-term objectives. 

On the technical front, immediate support, and resistance in Nifty50 are 15700 & 16200 respectively. Bank Nifty immediate support and resistance are 32400 and 33800 respectively. 

Expert: Sandeep Jain – TradeSwift Director 

Investors should do staggered buying in fundamentally good stocks, as market is trying to come back in green zone. The last hour buying in the market on Tuesday, gives hope and could be considered it as short covering. Averaging of heavyweights of HDFC and HDFC Bank could be done on Wednesday.