The positive and stable results by ICICI, Axis and Bajaj Finance have changed the momentum of the markets which showed weakness in the past few weeks. Mohit Nigam, Head, PMS, Hem Securities said he expects the momentum to continue with a stronger movement across small and mid caps especially in the chemicals segment. 15,000 becomes a psychologically important resistance for the markets to break for further upside, 14,650 becomes the fresh support.
Markets continued the positive momentum carried since Tuesday and closed almost 1.5 percent higher. Bank Nifty ended 3 percent higher today and was the chief driver of the rally second day in a row. At close of trading on Wednesday, the Sensex was up 789.70 points or 1.61 percent at 49733.84. The Nifty was up 211.50 points or 1.44 percent at 14864.50.
Bajaj Finance, IndusInd Bank, Eicher Motors, Bajaj Finserv and Kotak Mahindra Bank were among top gainers on Nifty, while losers were Britannia Industries, Hindalco Industries, Nestle, Divis Labs and HDFC Life.
Except metal and pharma, all other sectoral indices ended in the green. BSE Midcap and Smallcap indices rose 0.7-1 percent.
Sumeet Bagadia, Executive Director, Choice Broking, said the markets surged on the back of better-than-expected corporate results and a drop in COVID-19 cases. Nifty closed ~1.4 percent higher led by strong gains in heavyweight banking stocks. ICICI bank, HDFC twins and Bajaj Finance were among the top contributors to index gains. Major sectoral indices closed on a positive note and Nifty Bank was the top performer with 3% gains while Nifty Metal, Pharma and Realty ended with losses.
Manish Hathiramani, technical analyst with Deen Dayal Investments told IANS: "The Index has crossed its resistance patch of 14,500-14,700 and is trading above 14,700 since the opening. If we can keep above this level on a closing basis as well, we should be headed to 15,000-15,100 levels. A closing past 14,700 will signal a shift in the trend from sideways to bullish and thereafter dips or intra-day corrections can be utilised to buy into this market," he said.
Sahaj Agrawal, Head of Research- Derivatives at Kotak Securities said Momentum support continues for the Nifty at 14150 levels. Volatility can increase in the short term. The medium term outlook continues to remains extremely positive, he said. "Banking and capital goods stocks can be accumulated on corrections; metals are expected to remain volatile," he said.
Shrikant Chouhan, Executive Vice President (Equity Technical Research), Kotak Securities said the market opened on a strong note and maintained the strong momentum throughout the day due to robust buying in banking and financial stocks. Technically, the Nifty has formed strong bullish candle near 50 day SMA and after a long time the index managed to close above 50 day SMA mark which is broadly positive for the market. But intraday chart suggest market is overstretched and it may take temporary pause near 14925/ 50100.
"We are of the view that the larger texture of the market is to the positive side and ideal strategy should be to buy on dips rather than chasing Nifty at higher levels. In the near future, 14,750-14,700/ 49,100-49,400 should act as an important support for the Nifty/ Sensex. We can expect uptrend continuation of wave up to 14,925-15,000/ 50,100-50,500," Chouhan added.
Abhishek A Rastogi partner at Khaitan & Co said, though the number of Covid cases has been on the rise, investors have understood the initiatives taken by the Central and the State governments. Together with the judicial intervention by various Courts on various fronts including supply of oxygen, exemptions to medical equipment and other related items and enhanced imports, these have been positive signals to the investors who are closely observing valuation of oxygen manufacturers and other related sectors, he added.
Global shares trade high
Global shares were moderately higher in listless trading Wednesday, as investors watched for news out of a Federal Reserve meeting.
Analysts said Asian investors have adopted a wait-and-see stance ahead of the Fed meeting. “But the wider point and the bigger driver of markets, as equities shuffled nervously ahead of the FOMC meeting today, is arguably just how much restraint the Fed will exercise,” said Venkateswaran Lavanya at Mizuho Bank.
Also on tap is President Joe Biden''s speech to a joint session of Congress, which is expected to lay out several parts of his agenda such as increased infrastructure spending, likely higher taxes on the wealthy and higher funding for government programs.