After The Bell: Market shrugs off COVID curbs to end higher, what should investors do on Friday?

Market Outlook

Indian markets remained resilient on April 15 despite restrictions kicking in Maharashtra and Delhi announcing a new set of curbs to stem galloping coronavirus infections. Investors took comfort from the fact a lockdown had been avoided.

The Kejriwal government in Delhi imposed a weekend curfew in the national capital to control the COVID-19 surge on a day India crossed another milestone as it reported 2,00,739 new cases.

The S&P BSE Sensex remained volatile on April 15 but bulls managed to regain control. The index rose 259 points to 48,803, while the Nifty50 rose 77 points to close at 14,581.

Sectorally, buying was seen in metals, banks, power, energy, as well as oil & gas stocks, while profit-taking was seen in auto, consumer discretionary, realty, and FMCG stocks.

“Auto stocks were worst hit today mainly due to wider economic restrictions imposed in Maharashtra, which contributes over 20 percent of automobile production of the country. Infosys witnessed heavy profit- booking after missing street’s estimate in 4QFY21 earnings,” Binod Modi, Head Strategy at Reliance Securities told Moneycontrol.

A continued surge in COVID-19 cases had dented investor sentiments. “However, the government’s strong effort to expedite vaccination progress in the country by allowing multinational vaccines in domestic markets and the absence of complete lockdown in Maharashtra offered some comfort to equities,” he said.

Here is what experts suggest investors should do on April 16:

Rohit Singre, Senior Technical Analyst, LKP Securities

One more positive session was witnessed on April 15 as the index ended the day at 14,581 with gains of more than 0.5 percent and formed a bullish candle for the second consecutive day.

The index formed a good base near the 14,460-14,350 zone and if it manages to sustain above it, it may move towards the 14,700-14,800 zone, which is the immediate and strong hurdle on the higher side.

The overall range for the Nifty would be between 14,250 and 15,000 on the higher side.

Chandan Taparia, Vice President | Analyst-Derivatives, Motilal Oswal Financial Services Limited

The Nifty formed a Bullish hammer candle with a long lower shadow, indicating declines were being bought.

It has to decisively hold above 14,500 for an up move towards 14,700 and 14,850, while on the downside, support exists at 14,350 and 14,250.

Vinod Nair, Head, Research, Geojit Financial Services.

The market is becoming more cautious as states increase restrictions due to the havoc created by the virus. Growth-oriented sectors and stocks are losing momentum, while defensives like pharma, FMCG & IT are gaining.

States, however, will not opt for a complete lockdown like last year but high valuation will lead to a phase of short-term consolidation.

Mohit Nigam, Head, PMS & Advisory, Hem Securities

On the data front, WPI inflation coming in at an eight-year high of 7.39 percent and the rupee hitting a nine-month low of 75.32 are hinting at inflationary pressures and foreign outflows in the capital market.

Tighter restrictions in Maharashtra, Delhi and Rajasthan further added to the jitters. The market volatility, however, is a knee-jerk reaction and the situation is likely to improve sooner than expected.

The current dips are an opportunity to add largecaps from the banking & IT sector, while we remain bullish on capital goods, technology and digital space. Technically, the Nifty can play in the 14,200-14,900 range.

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