Markets end positive after Nifty and Sensex both hit fresh highs intra-day; tech and auto stocks in top gear while oil & gas and FMCG see 1% plus decline

Markets end positive after Nifty and Sensex both hit fresh highs intra-day; tech and auto stocks in top gear while oil & gas and FMCG see 1% plus decline

The Nifty ended trade just a tad below 20,200 at 20,192 after hitting a fresh intra-day high of 20,222. The Sensex too climbed to a fresh 52-week high of 67,927 before closing at 67,838, up 300 points. The broader markets too ended in the positive zone and the market breadth was evenly poised. Mid and small cap indices also clocked steady gain sending up about half a percent.

Among the sectoral indices, Auto and IT were among the star performers. Key auto stocks like M&M, Hero MotoCorp, Bajaj Auto and TVS Motor ended with strong gains and the Nifty Auto Index closed with 1.5% gains. The Oil and gas stocks along with FMCG , however saw significant decline and featured amongst the top losers in the market.

Amol Athawale, Vice President – Technical Research, Kotak Securities added that, “A status quo on rate hikes would further bolster investors’ sentiment as this would give a further leg up to the economy on hopes of softening interest rate stance going ahead. A drop in US treasury yields have resulted in a recovery in world equity markets and also had a rub-off effect on local markets. On daily and weekly charts, the Nifty has formed a breakout continuation formation which is indicating that the uptrend wave is likely to continue in the near future. Although the larger texture of the market is bullish, the market is in temporary overbought conditions, and hence we could see some profit booking at higher levels. For short-term traders, 20075 and 20000 would act as key support zones while 20300-20375 could act as crucial resistance areas for the bulls.”

Technical outlook

Outlining the technical levels to watch out for, Jatin Gedia– Technical Research Analyst at Sharekhan by BNP Paribaspointed out that “the hourly momentum indicator though having a positive crossover is showing signs of negative divergence which should not be underestimated. Overall, the short-term outlook is positive, however considering the sharp run-up since last three trading sessions we should have a cautious stance and be prepared for a correction. In terms of levels, 20050 – 20000 is the crucial support zone while 20200 – 20250 shall act as an immediate hurdle zone.”

Speaking on the levels to watch out for Bank Nifty, he added that the Index “has also been trading with a positive bias. It has now reached the zone of 46370 – 46400 where resistance in the form of weekly upper Bollinger band and the previous swing high is placed. Thus, after rallying for three weeks there is high probability of a consolidation. Crucial support is placed in the range 45970 – 45670 and crucial resistance is placed at 46300 – 46400”