Markets Ahead- Nifty, Sensex recover from Adani blow, end in green after 3 days; now, eyes on Budget, US Fed

Markets Ahead: Nifty, Sensex recover from Adani blow, end in green after 3 days; now, eyes on Budget, US Fed

Benchmark Indian equity indices closed Monday’s session higher in green, snapping a three-day losing streak, showing a mild recovery from the fallout of Adani-Hindenburg rout. Nifty 50 advanced 0.25% to close at 17,649 while Sensex closed at 59,500, rebounding over 800 points from the day’s low. Bank Nifty staged an intraday day recovery of almost thousand points, closing at 40,387 after touching an intraday low of 39,419. Sectorally, Nifty FMCG and Nifty Oil & Gas were the top laggards, while Nifty IT and Nifty PSU Bank gained 1%.Markets Decoded: Traders cautious ahead of Budget, FOMC outcome

“The response by Adani had a mixed effect on the stock group and market. The saga is likely to continue as a hanging risk in the minds of the investors in the medium-term. To expect a scientific assessment report either by a strong independent third party or government is dim in the short-term. Now the focus of the market will be on budget and fed policy.” – Vinod Nair, Head of Research at Geojit Financial Services

“Volatility continued to be the order of the day, as benchmark Sensex gyrated nearly 1000 points intra-day before staging a smart comeback in late trades on selective buying. Two big events, the interest rate decision by the US Federal Reserve and the Union Budget are keeping investors nervous.” – Shrikant Chouhan, Head of Equity Research (Retail), Kotak Securities

Nifty Technical View: Resistance at 17,760, support at 17,493

“Nifty showed signs of making a temporary bottom by forming a bullish counterattack pattern. Ahead of the Union Budget/US Fed meet outcome, the markets could remain volatile with an upward bias for the next few sessions. 17,760 could be the resistance for the Nifty while 17,493-17,542 band could offer support.” – Deepak Jasani, Head of Retail Research, HDFC Securities

“A reasonable positive candle was formed on the daily chart with upper and long lower shadow. Technically, this pattern indicates a formation of high wave type candle pattern, which signal high volatility in the market. Nifty sustained above the important support of 200Day EMA at 17,550 levels in the last two sessions, after violating below it. The said moving average has offered important supports and resistances in the past and that has resulted in a substantial movement on either side. After showing a decisive downside breakout of broader range movement of 18,200-17,800 levels on Friday, the Nifty not showing any sharp follow-through weakness on Monday could be a positive sign for the bulls to make a comeback from the lows.

Occurrence of high volatility in the market (formation of doji) at the lows, placement of crucial support and not showing any sharp weakness post downside breakout of range movement are all pointing towards possible comeback of bulls from the lows. A sustainable move above 17,800 is expected to confirm the trend reversal on the upside.” – Nagaraj Shetti, Technical Research Analyst, HDFC Securities