Nifty Gains Over 200 Points Amid Broad Based Buying

Market Closing Views - Mr. Nandish Shah - Deputy Vice President, HDFC Securities

After two healthy correction sessions, Nifty staged a sharp rebound, gaining 211 points to close at 25,682. Opening 48 points lower, it reversed swiftly, climbing over 300 points from intraday lows to settle near the day's high. NSE cash volumes dropped sharply 28% from the prior session.

Power Grid, Coal India, and HDFC Bank topped Nifty gainers. Conversely, Tech Mahindra, Bajaj Finance, and Maruti faced the brunt of the selling pressure, ending as the day's primary laggards.

The recovery was broad-based, with all sectoral indices ending in the green except Nifty Media and Auto. Amongst them, Realty, PSU banks, and Bank Nifty ended as top gainers.

The broader market mirrored the benchmark's strength but with less intensity. The Nifty Midcap 100 climbed 0.48% and the Smallcap 100 edged up 0.11%. Despite the bounce, market breadth remained subdued with an advance-decline ratio of 0.72, indicating that profit-booking persists in the mid and small-cap segments.

The Indian rupee bucked the broader regional trend of gains in Asian currencies and equities, settling slightly lower after an upside surprise in inflation numbers. Market participants are pivoting their focus to trade balance data for further catalysts in the absence of global cues.

Nifty formed a bullish "Engulfing" candlestick pattern on the daily chart, the first signal of a potential trend reversal. The index has now reclaimed levels above its 20 and 50 day exponential moving averages (DEMAs). Today's low of 25,372 establishes new support. A decisive close above 25,752 would negate the gap's bearish implications, paving the way for a rally toward the next resistance at 26,000.

Source : Equity Bulls

Keywords

HDFCSecurities Nifty Sensex