Dalal Street Corner: Market participants need to be vigilant until the Nifty is seen

Domestic stock markets cut a six-day losing streak on Monday and closed green amid neutral global signals. Both benchmark indices – Sensex and Nifty 50 – rose nearly 0.4 percent, while broader markets – mid-cap and small-cap markets closed up more than 1 percent.

As many as 33 stocks advanced, 16 declined and one Nifty remained unchanged at 50. Eicher Motors rose the most at about 8 percent, followed by Apollo Hospitals at more than 4 percent.

In contrast, cement heavyweights such as Ultratech Cement and Shree Cement ended up 3% and 2.5% lower in response to Adani Group’s announcement of acquisition of control stake in Swiss-based company Holcim from Ambuja Cements and ACC.

Sectorally, Nifty PSU Bank rose nearly 3 percent, followed by Nifty Real by 2.5 percent and Nifty Auto by more than 2 percent. While Nifty Bank, Financial and Metal each rose 0.5 to 1.5 percent each. All sectoral indicators closed high expectations for FMCG, IT and pharma.

Shares of Diagnostic and Pathology Company have witnessed profits ahead of their Q4 earnings behind the highly competitive intensity, LKP Securities said in a market comment.

In the primary market, Life Insurance Corporation of India (LIC) ‘s largest initial public offering (IPO) in India is expected to make a flat debut on the exchange on Tuesday, market analysts expect. Also, the Paradip Phosphates public offer is open for Tuesday, and will remain active until May 19, 2022.

We have gathered the opinions of various experts on what investors should do when resuming trading:

Expert: Binod Nair, Head of Research, Geojit Financial Services.

Continued selling by FIIs (foreign institutional investors) as they chase after high yielding US bonds, limiting the Indian market to hold its pull-back rally despite the interest of domestic investors.

Weak global equities and unfavorable global signals led to heavy sell-offs towards closing times, as investors lacked confidence to advance their position. Investors are currently in a risk-reducing phase, searching for safe haven investments.

Expert: S. Ranganathan, Head of Research, LKP Securities.

Auto and banks helped keep benchmark indices green on Monday as investors worried about rising inflation and its impact on discretionary spending. The wider market is witnessing a deep interest in companies that may post good numbers in the first quarter of the current financial year.

Expert: Rupak Dey, Senior Technical Analyst at LKP Securities.

The Nifty is about to consolidate in a narrow range as the benchmark index has failed to provide any directional movement. The sideway pattern can continue as long as the Nifty is in the tight bands of 15800 and 16000 on a closing basis.

A decisive breakout on both sides can induce a decent move towards a breakout.

Expert: Gaurab Ratnaparkhi, Head of Technical Research, Sharekhan of BNP Paribahan

The Nifty opened on a positive note and sought to build on the initial gains. On the upside, however, it stumbled near the 16000 mark. Thus, the indicator fluctuated throughout the day and eventually formed a dodgy pattern on the daily chart and showed indecision in the minds of the participants.

The index is expected to remain under pressure as long as it trades below 16000. In that case, it could test the March 15671 minimum. Conversely, if the bulls could outperform the 16000 mark on a closing basis, the Nifty could jump to 16200-16250.

Expert: Ajit Mishra, VP – Research, Religare Broking Ltd.

As markets are closely following global signals, the rebound in the US market is also hoping for some respite on the domestic front.

However, we advise participants to remain cautious until they see any signs of change in the Nifty index. In the meantime, the sectors are offering trade opportunities on both sides so there should be more focus on stock selection and risk management.

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