Indian markets back in green; Nifty IT & Nifty Pharma shine

Karan Dsij
Indian markets back in green; Nifty IT & Nifty Pharma shine

Market Update at 02:11 PM: The Indian markets witnessed a sharp recovery in the afternoon session as Nifty recovered almost 185 points from the lower levels and it is trading just above the 15,800 mark. The recovery has been aided by the index heavyweight, Reliance Industries, Infosys and Bajaj Finance.   

Among the sectoral indices, Nifty IT, Nifty Pharma, and Nifty FMCG were trading in the green. On the other hand, Nifty Metal and Nifty Realty were the top laggards.   

On the options front, Nifty 15,700 Put options have seen the addition of 15.57 lakh shares in the open interest. With this, the total open interest in the 15,700 Put option rises to 40.56 lakh shares. On the Call side, Nifty 15,800 Call option has seen maximum addition of open interest in today’s session.   

 

Market Update at 10:37 AM: Nifty has recovered 100 points from the day’s low and it has reclaimed the level of 15,700, aided by gains in the index bellwether Infosys and Reliance Industries. However, sustenance of Nifty above the 15,700 could be tough as the 15,700 Call option has seen aggressive addition of open interest in today’s session as more than 22 lakh shares have been added in the 15,700 Call Option.  

Among sectoral indices, barring Nifty IT, all other sectoral indices were trading in the red.   

Among stock-specific action, Eclerx Services, Dhauka Agritech, NBCC, Jindal Stainless (Hisar) are some of the stocks, which have registered their 52-week highs in today’s session.   

 

Market update at 9:35 AM: The Indian benchmark indices have cracked impulsively in the early deals on Monday. Nifty slipped below the 15,700 mark while Sensex is hovering around the 52,100 mark. Around 44 stocks of Nifty 50 were trading in the red. The fall is not restricted to large-cap stocks, the broader market too succumbed to selling pressure with Nifty Mid-cap 100 and Nifty Small-cap 100 tumbling 2.07 per cent and 1.88 per cent, respectively.   

All the sectoral indices were trading in red with Nifty Realty and Nifty Metal plunging over 2 per cent each. 

Adani Group stocks have been under the hammering during today’s session as there are reports in media that NSDL has frozen the accounts of three foreign funds.  

 

Nifty extended its northward journey for the fourth straight week and for the first time in this calendar year, the index recorded gains during a similar period. However, in the last week, the pace of upmove has receded as Nifty registered gains of less than a per cent. Having said that, the broader market outperformed the headline as Nifty Mid-cap and Small-cap logged gains of 2.92 per cent and 2.90 per cent, respectively. Even in Nifty, apart from select heavyweights from the IT space, most heavyweights remained range-bound. During the last week, the banking index underperformed significantly as it ended the week in the red.   

The week gone by was a historic one as Nifty for the first time touched the 15,800 mark and after a shakeout day on Wednesday, it resumed its upmove and logged a fresh all-time high of 15,835.55. However, it cooled off from the higher levels to end near the 15,800 mark. Technically, Nifty retraced exactly 127.6 per cent of its previous fall. It has formed a Doji pattern on the daily chart as the closing was near the opening level while on the weekly scale, it has formed a small body bullish candle with a long lower shadow.   

The formation of Doji near the 127.6 per cent of retracement of its previous fall exhibits some fatigue at higher levels for the index. We have used the word ‘fatigue’ and not reversal as the technical structure of the index is still strong and there are no signs that indicate weakness on the charts. Currently, Nifty is trading 2.47 per cent above the 20-DMA as well as 15.76 per cent above the 50-DMA. The distance from these short-term averages is also important to gauge the market stretch. In the earlier instances when the index had moved over about 4.5 per cent to 6 per cent away from its 20-DMA and nearly 20 per cent away from the 50-DMA, it has pulled back and reverted to mean. Hence, this indicates that some more steam is left in the index on the upside.   

Going ahead, the level of 15,550 is likely to act strong for Nifty in the near term while on the upside, the level of 15,835 may act as an immediate hurdle. A close above the 15,835 would mean that the index negates the implication of Doji pattern. On the other hand, a close below the low of Doji would mean that the bears have got their foot in the door.   

Moreover, on Monday morning, the first thing that the market is likely to do is to react to the IIP numbers. IIP surged 134.44 per cent YoY to 126.6 in the month of April 2021, primarily due to a low base in the previous year. However, more than opening, we would like to see the close of Nifty. This is due to the fact that we had mentioned earlier that a close above Friday’s high would negate the implication of Doji.

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