Post Market Analysis of Equity Sensex

The market bounced back into positive territory after a fall in the last three trading sessions. Sensex nearly rose 300 points on the back of renewed buying in PSU banks, cement, and IT index. Sensex jumped 274 points, or 0.5%, to 61,418.96, while the Nifty rose 84 points, or also 0.5%, to 18,244. Markets recovered in the last hour of sessions after European markets and US Future bounced back into the green. Brent crude price fell to a 3-month low of below $87/bbl, India Vix fell to a 2-year low below 14 on a closing basis and strong economic data boosted market sentiment.

Among the global markets, Asian markets ended mixed bag as the Covid-19 resurgence in China increased concerns that Beijing may re-impose strict pandemic curbs which could lead to supply chain disruptions. European and US Future gained ahead of US Fed minutes of meeting due on Thursday.

The northbound journey continued in PSU Banks with the Index rising by 2%. UCO Bank climbed up by 12% to close at Rs21. Bank of India and Indian Bank surged by 4% and 2% respectively to close 52-week highs at Rs80 and Rs275 respectively. Bank of Baroda, PNB, and Union Bank gained between 1-3%.

Tech stocks witnessed fresh buying and the Nifty IT Index gained nearly 1%. Persis Systems, Coforge, LTTS, Infosys, and TCS gained 1% each. Shipbuilding stocks witnessed fresh buying after a correction of 5-10% in the last few sessions. Impressive quarterly results, strong fundamentals, and a backed by government order book lifted shipbuilding stocks. Mazagon Dock climbed up by 12% to close at Rs892. Both Great Eastern Shipping and Cochin Shipyard surged by 6% and 8% respectively.

Nykaa was down nearly 12 percent to close a record low of Rs477 as private equity player Lighthouse India will sell shares worth Rs 335 crore in FSN E-Commerce Ventures through a block deal today.

Technical Outlook:

The nifty index opened positive and moved in the upward direction but lacked momentum for the most part of the session. It witnessed a good move in the last hour of the day and reached its previous day’s high to close with gains of around 85 points. It has been making lower highs on a daily scale from the last four trading sessions and needs to negate the same to get stability and a fresh leg of an upside move in the market. It formed an Inside Bar and a Bullish candle on a daily frame with long lower shadows indicating support-based buying. Now, it has to hold above 18200 zones, for an up move towards 18350 then 18442 zones whereas supports are placed at 18088 and 17950 zones.