Markets Tomorrow- Nifty, Sensex rebound from lows; markets may remain flat as rate hikes, Covid dampen mood

Markets Tomorrow: Nifty, Sensex rebound from lows; markets may remain flat as rate hikes, Covid dampen mood

Bulls staged a comeback on Dalal Street on the monthly F&O expiry day as domestic indices NSE Nifty and BSE Sensex rebounded after trading in the red. Nifty recovered 200 points from its intraday low and closed at 18191, while Sensex gained 0.3% to settle at 61,133. From dropping over 0.5% intraday, Bank Nifty trimmed its losses, gained 762 from the day’s low to end at 43,252. The broader markets closed primarily in the green after opening in the red; Nifty Midcap 100 and Nifty Smallcap 100 ended flat. Sectorally, Nifty PSU Bank and Nifty Private Bank gained 0.7% and 1.03% each as ICICI Bank, HDFC Bank and SBI led the gains.Markets Decoded: Covid continues to affect sentiment

“The domestic market trend was influenced by the movements of its global counterparts, as a negative US closing pushed Indian bourses to a poor start. However, positive signals from US futures lifted the benchmark index above the flatline. Markets will continue to witness such sudden movements, underpinned by lingering recession and Covid fears, which will be countered by bargain hunters.” – Vinod Nair, Head of Research, Geojit Financial

“Markets shrugged off intra-day volatility as last hour buying helped key indices end in the green. Investors covered their positions on the last day of the December monthly expiry, fuelling an upsurge in metals, banking and oil & gas shares on hopes of a demand revival after China lifted Covid-related restrictions. But sideways movement will continue going ahead as recessionary fears in the West continue to loom large in view of more likely rate hikes and tempered growth going ahead.” – Shrikant Chouhan, Head of Equity Research (Retail), Kotak Securities

F&O Expiry: Last hour trades helped Nifty end higher

“Last hour trades for F&O monthly expiry squaring off/rollover and Nifty index weight rejig trades helped Nifty end 0.38% or 68.50 points higher at 18191. Volumes in the NSE cash market were the lowest in 6 months for F&O expiry day. Broad market indices rose less than the Nifty as focus was on largecaps and advance decline ratio ended at 1.18:1.” – Deepak Jasani, Head of Retail Research, HDFC Securities

Nifty Technical View: On edge of upside breakout of hurdle at 18200 level

“Technically, Nifty took support near 18000 and bounced back sharply. A bullish candle on daily charts and higher bottom formation on intraday charts is indicating further uptrend from the current levels. For bulls, 18000 would act as a sacrosanct support zone, and above the same it could move up till 18280. In case of further upside the index could move up to 18400. On the flip side, below 18000 traders may prefer to exit out from the trading long positions and below the same the index could slip till 17900.” – Shrikant Chouhan, Head of Equity Research (Retail), Kotak Securities

“A long positive candle was formed on the daily chart, which confirms the important bottom reversal pattern that was formed a few sessions back at 17774 levels. Presently, Nifty is placed at the edge of upside breakout of the crucial hurdle at 18200 levels. Hence, a sustainable move above 18200 levels could be considered as a false downside breakout of the support recently and such a pattern is likely to have a positive impact on the market ahead. So, a decisive move above the said hurdle could pull Nifty towards upside target of 18500 levels in the near term. Immediate support is placed at 18080.” – Nagaraj Shetti, Technical Research Analyst, HDFC Securities