Dalal Street Corner: Stock markets see last hour recovery to end positive on Friday; what should investors do on Monday?

The last-hour recovery helped the Indian stock markets close in the green, with Sensex rising over 111 points and Nifty settling above 17,813-mark on Friday. The surge was mainly led by bank and FMCG stocks 

The broader markets closed in-line with benchmarks as Nifty mid-cap index up 0.5 per cent and small-cap gained around 0.4 per cent at the close. Similarly, the 12-share banking index, Nifty Bank gained 249 points to closed at 37,740-level, led by private lenders such as ICICI Bank and HDFC Bank. 

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Grasim and ONGC gained most and were up by over 4 per cent each, followed by Hindalco which was up nearly 3 per cent. Meanwhile, Bajaj twins and Mahindra & Mahindra shares declined most by around 2 per cent at the close. As many as 32 stocks closed in the green, while 17 in the red and one remained unchanged on the Nifty50 at close. 

“Traders were seen piling up positions in Basic Materials, Oil & Gas and FMCG sectors while selling witnessed in Capital Goods, Telecom and Consumer Durables sectors’ stocks. The overall breadth too was positive, with more than 2,000 advancing shares on the BSE versus 1277 declining stocks,” Mohit Nigam, Head - PMS, Hem Securities said in post market comment on Friday. 

He added, the power sector remained in focused, as Power Ministry in its latest report said that CPSEs under Ministry of Power have incurred capital expenditure of Rs. 40395.34 crore till December during FY2021-22, 47 per cent higher than the expenditure incurred in FY 2020-21. 

“Asian markets were trading mixed after more declines in big technology stocks pulled major indexes lower on Wall Street. European markets were trading lower as investors bet Friday’s U.S. jobs data would do little to change the Fed’s path toward earlier tightening, Nigam pointed out 

“On technical front, Nifty's immediate support and resistance can be 17,500 and 18,000 respectively. While for Bank Nifty 37000 and 38200 may act as immediate support and resistance”, he said. 

Vinod Nair, Head of Research at Geojit Financial Services said, “Strong appetite for healthcare and consumer durable stocks aided the markets in closing flat with a positive bias. Although rising omicron cases and hawkish stance by the US Fed is keeping the market volatile, hopes of favourable earnings season and FIIs switching to net buyers is pumping in optimism into the market.” 

Vijay Dhanotiya, Senior Research Analyst at CapitalVia Global Research Limited said, “We saw some volatile movement in the market after a failed attempt to sustain the Nifty 50 Index level of 17800.” 

“Our research suggests that 17600 will be an important support level in the market. If the market is able to sustain above the market levels of 17600, we can witness a positive momentum in the market which can lead to the higher levels near 18000,” Dhanotiya added. 

“Nifty index opened positive but remained highly volatile in a wider trading range of 200 points in between 17700 to 17900 zones. It failed to hold at higher zones but declines were being bought and finally it closed near to the middle range of the day with gains of around 65 points,” Chandan Taparia Vice President | Analyst-Derivatives Motilal Oswal Financial Services Limited said in a note 

He added, “It formed a Spinning Top sort of candle on daily while a strong Bullish candle on weekly scale which indicates buying interest is intact in the market but absence of follow up is also seen at higher zones. Now it has to hold above 17777, for an up move towards 18000 and 18200 whereas support shifts higher to 17600 and 17500 zones.”