Strong financial performance by Banks boosted stock markets, Nifty recaptures the 18000 mark, what to expect from stock markets next week.
Reversing the previous week’s losses Dalal Street made a significant stride forward this week with strong earnings reported by heavyweights, especially banks, boosted sentiments. Foreign portfolio investors (FPIs) have been buyers throughout the trading sessions in April month so far. On a reasonable valuation of stocks, they invested more than Rs 9,000 crore in Indian equities. Besides, according to the RBI data, India’s forex reserves rose by $1.657 billion to $586.412 billion as of April 14, marking their second consecutive week of increase. These positive signals led the BSE Sensex to surge 1,457 points, or 2.4 per cent, at 61,112 during the week ended April 28, while the Nifty gained 441 points, or 2.5 per cent, to 18,065.
Market veteran Deepak Jasani, Head of Retail Research at HDFC Securities, said “Nifty rose for the fifth consecutive session on April 28 driven by positive global cues. At close, Nifty was up 0.84 per cent or 149.9 points at 18065. Volumes on the NSE were on the higher side as broad market participation rose. Midcap and Smallcap indices rose more than the Nifty as the advance-decline ratio was up at 2.08:1. Asian stocks rose on Friday as strong corporate earnings lifted sentiments and the Bank of Japan kept rates ultra-low even as it announced a broad review of monetary policy and modified its forward guidance by removing a pledge to keep interest rates at current or lower levels.
Jasani added “European stocks edged lower on Friday after Eurozone GDP data for the first quarter missed expectations while inflation data stirred concerns that Eurozone interest rates would have to increase further to stave off price rises. Nifty rose smartly by crossing the 18000 level aided by the last half-hour sharp buying on Friday. It rose 2.50 per cent over the week, posting the largest percentage rise in 9 months. It has now offset the bearish implications of Engulfing pattern formed on weekly charts in the previous week. 18134-18201 band could now offer resistance while 17842 could offer support.” he said.
As many as 45 stocks in the Nifty 50 index delivered a positive return for investors in the week. With a gain of 9.1 per cent, Tata Consumer Products emerged as the top gainer in the index. It was followed by Larsen & Toubro (up 6.8 per cent), State Bank Of India (up 6.5 per cent), Nestle India (up 6.2 per cent), and Bajaj Finance (up 5.8 per cent). Britannia Industries, Wipro, Bharti Airtel, and ITC also advanced by over four per cent. On the other hand, Hindustan Unilever, Cipla, and Axis Bank declined 1.7 per cent, 0.8 per cent, and 0.4 per cent, respectively.
Sector-wise, all major sectoral indices have posted positive numbers while the BSE Realty index surged the most (5 per cent) during the week gone by. While BSE Capital Goods and BSE Power indices have registered a weekly gain of 4.5 per cent, and 3.4 per cent, respectively.
Vinod Nair, Head of Research at Geojit Financial Services said “Despite concerns about potentially weaker US GDP numbers and high inflation, the stronger-than-expected earnings reported by Meta propelled IT stocks to the forefront of the Wall Street rally. The trend was reflected in the domestic market, as beaten-down IT stocks helped to lift broader market sentiment. However, with US inflation remaining high, the prospect of another rate hike by the Fed is looming, keeping global markets volatile in the coming days”.
Technical Outlook
Nifty: Nagaraj Shetti, Technical Research Analyst, HDFC Securities said: “A long bull candle was formed on the daily chart with minor lower shadow. Technically, this pattern indicates a continuation of upside momentum with strength. Presently, Nifty is moving towards the formation of a new higher top, which is not confirmed yet.”
He added “Nifty on the weekly chart formed a long bull candle, that has negated the last week’s bearish engulfing candle pattern and closed above it. Bank Nifty continued its upside momentum and is currently placed near the crucial hurdle at 43500 levels. The short-term uptrend of Nifty remains intact and the market is expected to reach up to the next resistance of 18200-18300 levels in the next week. Immediate support is placed at 17900 levels.” Shetti said.
Bank Nifty: Rupak De, Senior Technical Analyst at LKP Securities, said: “The Bank Nifty continues to remain in strength despite the subdued move from the most heavyweight. The index has remained above the consolidation breakout point on the daily chart. Besides, the index has remained above the critical moving average. The trend will likely remain positive as long as it remains above 43000 on a closing basis. On the higher end, Bank Nifty might move towards 43300/43500 over the near term”.
