Indian market reacted positively to strong global cues on Match 30 that pushed benchmark indices higher by more than 2 percent towards the close of the trade. The S&P BSE Sensex closed above 50,000, while the Nifty50 reclaimed 14800.
The market posted its biggest one-day gains of the last two months, with the Sensex closing 1,128 points higher at 50,136, while the Nifty50 ended with gains of 337 points at 14,845. The average market capitalisation of the BSE listed companies rose by Rs 3.5 lakh crore.
Sectorally, buying was seen in stocks like IT, metal, healthcare and FMCG, up more than 2 percent each.
“The unblocking of the Suez Canal and expected unveiling of an infrastructure plan from US President Joe Biden buoyed sentiments on the street,” Devarsh Vakil, Deputy Head of Retail Research, HDFC Securities, said.
“Technically, with the Nifty surging higher and closing above the crucial 20-day SMA, the bulls seem to have an upper hand in the short term,” he said.
The bulls seem to be ignoring the spike in COVID-19 cases in India and across the globe and also the rise in the dollar index as well as US treasury yields. Experts advise caution but also say that a break above 15,000 can put the Nifty on the path of new highs.
“It’s surprising the way the benchmark is showing resilience amid mixed cues. Going ahead, upcoming data viz. core sector and auto sales along with global cues will remain on the participants’ radar,” Ajit Mishra, VP – Research, Religare Broking Ltd told Moneycontrol.
“Needless to say, the recent deterioration of the COVID-19 situation in India has dented sentiment and will be closely watched by the participants in the coming sessions too. We thus reiterate our cautious stance until we see some decisiveness in the trend.”
Here is what experts suggest investors should do on March 31:
Rusmik Oza, Executive Vice President, Head of Fundamental Research at Kotak Securities
The Nifty has again gone above the 50-DMA led by gains in high-quality stocks. Except for depreciation on March 30, the rupee has remained quite steady even though the dollar index rose.
While the US 10-year bond yields have spiked, India’s have remained quite stable. These two factors could act in India’s favour and help Indian equities outperform their peers in the emerging markets.
The recent correction could be due to rising Covid-19 cases and the year-end phenomenon, wherein retail and HNI investors would have avoided taking any fresh positions.
The start of the new settlement for FY22 and forthcoming fourth-quarter earnings seasons could be the reasons for fresh investor interest in stocks. US markets, especially the Dow Jones and S&P 500, are showing a firm uptrend due to the ongoing stimulus and faster vaccination drive, which could also be one of the reasons for India’s markets to inch upwards.
Shrikant Chouhan, Executive Vice President, Equity Technical Research, Kotak Securities
The formation of a Bullish Harami served as a powerful reversal formation for the market. The Nifty crossed the 14,750 levels and moved very close to 14,900.
On March 31, we would see some increase in bank stocks, mainly because the Bank Nifty closed above 33,700. The Bank Nifty can go up to 34,500-34,700.
If the Bank Nifty performs, the Nifty could move closer to 14,900 and 15,050 levels. The Nifty would find major support at 14,730 and 14620 levels. Buy between 14,750 and 14,730 and keep a stop loss at 14,600.
Chandan Taparia, Vice President | Retail-Research at Motilal Oswal Financial Services Limited
The Nifty formed a healthy bullish candle and is forming higher lows from the last two trading sessions along with its hold above 50 DEMA.
Now, the index has to continue to hold above 14,750 zones to witness an up move towards 15,000 and 15,100 zones, while on the downside, support exists at 14,600 and 14,500.
Abhishek Chinchalkar, CMT at FYERS
For the short term, in spite of the generally supportive global cues, we could witness bouts of volatility in the domestic market.
A stronger dollar and rising US yields, in particular, remain the key forces to watch out for as they could act as headwinds to the short-term recovery. Hence, one needs to trade cautiously and take a sector-specific stance.
Technically, last week’s high of 14,878 is the immediate hurdle for the Nifty. If the index surpasses this level, the recovery could extend towards 14,985-15,060.
The day’s low of 14,617 now becomes the immediate support to watch out for, a break below which is likely to resume the downside pressure on the index.
The Nifty started recovering from the 61.8 percent retracement of the entire February rise as well as from the lower end of a wedge pattern. The positive momentum continued on March 30. As a result, the index opened gap up and broke out from the wedge pattern on the upside.