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Stock Market Highlights: Indian stock benchmarks Sensex and Nifty rallied in a weak rebound on Thursday, driven by strength in oil & gas, financials, IT and pharmaceutical stocks. Both benchmark indices ended a four-day dry spell, a day after the RBI announced an expected 50 basis point hike in interest rates. However, weakness in metal stocks limited upside potential. Broader markets also ended the volatile session in the green, with the Nifty Midcap 100 and Nifty Smallcap 100 indices up 0.5% and 0.2% , respectively. Investors around the world awaited news from central bank meetings to get more clarity on the impact of worsening inflation on interest rates and economic growth. Sensex and Nifty ended their 4-day losing streak Thursday as bulls pushed benchmark indices higher. The Sensex rose 427 points, to 55320, while the Nifty rose 121 points, or to 16478.
Indian benchmark indices broke a four-day losing streak to finish in the green in a highly volatile session. On the technical side, the key resistance levels for Nifty50 lie at 16550 and on the downside, 16300 can act as a strong support. The key resistance and support levels for Bank Nifty are 35550 and 34800 respectively. The market continued to be dominated by a volatile global market with investors weighing the impact of the upcoming global central bank meetings. However, the domestic market recouped losses during the closing hours on positive moves in US futures. FIIs are cautious on Fed policy, although the market may have priced in a 50 basis point rate hike due to the risk of tightening. Markets have seen volatile swings across a broader spectrum and most sectors are trading in tandem with the trend. We reiterate our cautious stance and recommend focusing more on sector/stock selection. Among the sectors, Auto and Oil & Gas look strong to us, while Metals could continue to trade on the downside, so plan your positions accordingly. Nifty made a lower low on June 9 compared to the previous day, but managed to close on the high in 3 sessions. For the reversal to continue, Nifty needs to break 16650 resistance, while 16500 could act as support. Barring the ECB sounding very hawkish at today's meeting, the Nifty's bullishness could continue in the next few meetings. Nifty formed a bullish engulfing pattern at the end of a volatile trading session. Also, the Nifty has moved back above 16425, which suggests bullishness. The daily RSI is in a bullish crossover and rising. Short-term trend could remain positive as long as it stays above 16425. On the upper end, resistance is seen at 16550/16750. Bank Nifty formed a penetrating line pattern at the end of a volatile trading session. Also, Bank Nifty is back above 35100 indicating bullishness.
Resistance: 16500, 16600, 16700
Support: 16400,
16300, 16200
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