After The Bell: A historic day, what should investors do on Monday?

Market Outlook

It was a fabulous Friday. Indian markets raced to fresh highs, riding on momentum in global markets. The Nifty50 touched a fresh high of 15,469, while the S&P BSE Sensex rallied more than 300 points.

The Sensex rose 307 points to 51,422, while the Nifty closed with gains of 97 points to 15,435.

The rally was powered by Reliance Industries that rose by about 6 percent to close at Rs 2,094. RIL has more than 11 percent weight in the Sensex.

“Friday’s rally was powered by Reliance Industries rising close to 6 percent during the day and closing near the levels of 2,095. The rally was mostly on the back of the expectations of strong petrochemical margins for FY22,” Mohit Nigam,Head PMS, Hem Securities, said.

Broader markets underperformed the benchmarks. The S&P BSE midcap index fell 0.12 percent and the smallcap was down by 0.48 percent.

Sectorally, rally was seen in energy, oil & gas, telecom, and metals stocks, while profit booking was visible in healthcare, power, utilities, and consumer durable stocks.

Experts see a continuation in the rally and say dips should be used as a buying opportunity as the momentum is here to stay. The crucial support for the Nifty is placed at 15,200.

Here’s what experts think that investors should do on May 31:

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

Technically, the index formed a small-bodied bullish candle on a daily scale and continued its formation of higher highs, higher lows of the last six sessions.

It has to hold above 15,300 to witness an up move towards 15,500 and 15,650. On the downside, support exists at 15,250 and 15,150 zones.

Vinod Nair, Head, Research, Geojit Financial Services

Constant fall in the US dollar is driving the Indian equity market along with a drop in coronavirus infection rate.

The sustenance of the rally is supported by the recent improvement in foreign investment with stabilising US yield and a drop in the dollar index. The rupee is gaining strength against the dollar.

Ashis Biswas, Head, Technical Research, CapitalVia Global Research Ltd

The market witnessed a positive trend on May 28. The Nifty is likely to move in the 15,250-15,600 range.

For the bulls to remain in control, it is important that the index holds on to 15,250. Momentum indicators like RSI and MACD support momentum and indicate upside from the current level.

S Ranganathan, Head, Research, LKP Securities

Markets remained in the green as investors basked in the glory of the $ 3-trillion market cap, which was achieved easily thanks to a broad-based rally.

With FIIs being net sellers during April and May the appetite shown by domestic investors is getting reflected in the buoyancy across the market breadth.

On May 28, the trade was led by the big boys—Reliance Industries and HDFC Twins—as profit-taking was seen across midcaps following the RBI’s comments on the consequences of liquidity infusion during the pandemic.

Disclosure: MoneyControl is a part of the Network18 group. Network18 is controlled by Independent Media Trust, of which Reliance Industries is the sole beneficiary.

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