Supportive factors such as positive global cues, strong results from India Inc., healthy economic data and RBI’s policy measures to support the economy helped market participants keep the concerns around rising COVID-19 cases at bay.
India has been recording around 4 lakh new COVID cases on a daily basis amid a second wave.
The benchmark indices climbed above crucial psychological levels in the week gone by. The S&P BSE Sensex closed above 49,000 while the Nifty50 managed to reclaim 14,800.
The S&P BSE Sensex rose 0.87 percent while the Nifty50 climbed 1.31 percent for the week ended April 7. In comparison, S&P BSE Midcap index rose 1.4 percent and S&P BSE Smallcap index rallied 2.5 percent.
Analysts attribute the rise in the broader markets to strong results posted by India Inc. in the small & midcap space.
“The Nifty-50 managed to climb the wall of worries and has posted weekly gains of ~1.3%. Indian markets are witnessing wild swings in the face of surging Covid-19 cases that have prompted several states to extend restrictions on movement by 1-2 weeks,” Rusmik Oza, Executive Vice President, Head of Fundamental Research at Kotak Securities told Moneycontrol.
“The broader markets are seeing very good action due to the result season. Both, NSE Midcap and BSE Small Cap Index have outperformed the Nifty-50 this week. Strong Data from the US and China is helping global markets to remain on the higher side,” he said.
As many as 49 stocks in the S&P BSE 500 index rose 10-30% in a week, which include Lupin, Hindustan Copper, Fortis Healthcare, Vedanta, Tata Coffee, Coforge, HFCL and Dish TV India.
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Sectorally, the Metal index remained as a top performer for the second consecutive week in a row rising over 10 percent in just 5 trading sessions. Metal prices have been on a rise ever since there is a strong global demand revival, suggest experts.
“This week the metal index especially steel has outperformed because China recently removed the rebate on VAT on their steel exports which means that exports from China will not be as lucrative as before and Indian players will be able to cater to the existing demand internationally,” Nirali Shah, Head of Equity Research, Samco Securities said.
What to watch out for?
On the earnings front, there are as many as 150 companies will report their results for the quarter ended March 2021 from 7-15 May. Investors will also watch out for daily COVID cases as well as inflation and IIP data.
“In the coming week, the trend in the market will be dictated by developments in the COVID spread, upcoming result outcomes, and global cues,” Vinod Nair, Head of Research at Geojit Financial Services said.
“Industrial production data for March and inflation data for the month of April is expected to be released this week. IIP data is expected to show robust growth due to economic recovery witnessed in March while inflation rates are to remain at elevated levels,” he said.
Technical View:
The Nifty50 reclaimed 14800 levels on a closing basis on Friday as well as 50-Days SMA. Experts are of the view that the index could face some resistance around 14900-15000 levels.
Traders should wait for a breakout above 15000 to initiate fresh long positions. “Nifty has formed an indecisive formation on the daily chart, however, on a weekly basis, Nifty gained 400 points from the lowest levels. The positive part of the week is that the Nifty-50 closed above the crucial resistance of 14800,” Shrikant Chouhan, Executive Vice President, Equity Technical Research at Kotak Securities said.
“The Nifty could climb to a minimum of 15000-15050 levels. However, the market would pick up the momentum, if it crosses 15150 levels. On the downside, 14600 and 14500 would be major supports,” he said.
Chouhan further added that during the week, FIIs sold heavily in the cash segment to the tune of 5500 crores that should reverse immediately otherwise it would minimize the upside for the market.
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