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Indian equity benchmarks Sensex and
Nifty rose sharply on Thursday amid broad-based buying, tracking a recovery in
global markets. Financials, FMCG, IT and oil & gas stocks were the largest
contributors to the gains in both benchmark indices. Broader markets also rallied,
with the Nifty Midcap 100 and Nifty Smallcap 100 indices each up about half a
percent. Globally, the war between Russia and Ukraine, Beijing's fight against
rising COVID infections and the Fed's dovish tone remained in focus. Both
leading indices ended the day 1.2%higher. The Sensex is up 701 points to 57521
and the Nifty is settling at 17,245, 206 points above its previous close. Investor’s preference is shifting to safe-haven
assets due to volatile equity market and global uncertainties indicated by
rising US Dollar index. FPIs are in a selling mode while domestic investors are
positive and will focus on defensives like Consumption and domestic growth
sectors like Infra & capital goods. Volatility is expected to continue in
the short-term due to weakening global trade and we suggest investors to have
rationale expectations focusing on domestic growth sectors like CAPEX, banking
and defensives. The Bank Nifty Index saw some buying from lower levels
last month end. However, the index is still trading below its 200-DMA, which is
at the 36700 level. To resume the uptrend, the index needs to cross its 200-DMA
with volume. Lower support lies in the 35700- 35500 range and a break below
will result in a fresh round of selling pressure. Even after the recent
correction that took Nifty below 17k on Wednesday, the stock market is
expensive and there is room for correction. It's a good thing to follow the
"sell in May and walk away" adage. I think that (sell and walk away
in May) is generally a good thing. I'm a proponent of that even though the
market is around 17k. There is room for corrections. Markets are expensive. So
this might not be the worst idea in the world.
Resistance: 17300, 17400, 17500
Support: 17200, 17100, 17000
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