The Indian equity indices closed higher after opening gap down on May 17. The Nifty 50 advanced 62 points or 0.28% to finally settle the day’s trading at 22,466.10. Sensex jumped 253 points or 0.34% to close the day’s trading at 73,917.03. M&M, Reliance Industries, ITC, Kotak Mahindra Bank, and Ultratech Cement were the major contributors in pushing the Nifty 50 higher, while M&M, JSW Steel, Grasim Industries, Ultratech Cements, and BPCL were the significant gainers. The volatility index was down 1.05%.
Sectoral indices higher
The Nifty Midcap 100 continued to outperform closing 451.60 points or 0.88% higher to finish the session at 51,604.90. However, Nifty Bank closed 139 points or 0.29% at 48,115.65.
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On the sectoral front, consumer durables, auto, and metal stocks led the indices higher. In the broader market, smallcap and midcap stocks closed in the green.
“Rally was seen in railway and defense stocks on the back of healthy order book and Q4 numbers. Also, a robust outlook post-election supported the buying interest. Markets on Monday will remain closed on the back of the Election Day. Nifty held on to its momentum and spurt more than 1% in the last two days led by short-covering and positive global cues. Markets on Tuesday would react to voter turnout in Phase 5 and economic events like Europe inflation data and China Loan Prime rate due over the weekend,” said Siddhartha Khemka, Head of Retail Research at Motilal Oswal Financial Services.
Foreign Institutional Investors continued selling spree with net sales reaching Rs 37,149 crore, while Domestic Institutional Investors have been providing support to the market with net purchases amounting to Rs 32,416 crore as of May 16, 2024. “The Nifty settled at 22,466 for the week, establishing base support at 22,250 levels,” said Vikram Kasat, Head of Advisory at Prabhudas Lilladher.
Nifty’s Technical Side
“The important key takeaway for Nifty is that it closed above the crucial resistance zone of 22,200-250 levels (50 Day EMA) and accordingly we believe that it is likely to test the next resistance levels of 22,500 and 22,750-800 on the higher side. Support for the Nifty is now seen at 22,350 and 22,200-250 levels. On the higher side, immediate resistance for Nifty is at 22,500 Mark and the next crucial resistance zone is at 22,750-800 levels (Previous ATH). Overall, Nifty is likely to remain volatile within the 22,200 – 22,800 range in the near term with a positive bias,” said Tejas Shah, Technical Research, JM Financial & BlinkX.
Bank Nifty
The Bank Nifty opened weak, however it recovered and closed in the green. “We expect the pullback to continue towards 48320 – 48700 from short term perspective. Hourly momentum indicator has a positive crossover which is a buy signal. The trailing stop-loss for the long positions should be kept at 47500,” said Jatin Gedia, Technical Research Analyst at Sharekhan by BNP Paribas.
Affect on Rupee
“The rupee traded positively, gaining more than Rs 0.17 to close at 83.35. This rise was driven by the Indian capital market’s positive reaction to favorable voting counts and expectations of the current government continuing its run. Domestic Institutional Investors (DII) inflows have contributed to the rupee’s stability, and the RBI’s strict zero-speculation norms have further checked any potential decline. In the coming sessions, the rupee is expected to trade in a positive range between 83.10 and 83.55,” said Jateen Trivedi, Vice President and Research Analyst of Commodity and Currency at LKP Securities.