Sensex, Nifty jump over 1%, here’s what pulled stock market from bears’ grip; analysts say buy quality stocks

Indian fairness markets bought out of bear’s grip on Thursday, a day of weekly and month-to-month F&O expiry, amid constructive world cues. The BSE Sensex ended 701 factors or 1.23% greater at 57,521, whereas NSE Nifty 50 settled 206 factors or 1.21% up at 17.245. The broader markets, nonetheless, continued to underperform the benchmark. The BSE MidCap index rose 0.8%, whereas the SmallCap index went up 0.12%. Sectorally, FMCG, energy, auto and capital items added 1-2% every. The up transfer got here on the again of dovish Bank of Japan coverage and inspiring earnings from a couple of giant names in India, in response to analysts. Investors are suggested to extend their allocation to quality stocks as and when the markets are close to the decrease vary of the above band.

What’s driving the rally and what ought to traders do?

Nishit Master, Portfolio Manager, Axis Securities, advised, “Indian markets are following global cues and have surged about a percent on back of dovish Bank of Japan policy and encouraging earnings from a few large names in India. We believe that markets over the near term will continue to be volatile and trade in a band of 16500 to 18000 for Nifty, while for the year we continue to be bullish. We would advise investors to increase their allocation to equities as and when the markets are near the lower range of the above band.”

Traders ought to stay bullish with a cease lack of 16800

“Indian equity markets surging today on the day of April month F&O expiry. First, long exposure in index futures had dipped to 33% and PCR was also in oversold territory, therefore, we are seeing a short-covering rally thanks to a surge in US futures. Technically, the Nifty is trying to form a base in the 17000-16800 zone which is a 50% retracement area of the previous rally however 17400 is a critical resistance; above this, we can expect a decent rally therefore traders should remain bullish with a stop loss of 16800 where stock and sector-specific approach will be continued,” mentioned Santosh Meena, Head of Research, Swastika Investmart.

Buy excessive quality stocks in banking, IT that are depressed as a result of FPI promoting

According to V Okay Vijayakumar, Chief Investment Strategist, Geojit Financial Services, ‘sell on rallies’ is prone to be the feel of the market. “A clear trend in markets now, in developed markets as well as in India, is the preference for value stocks over high-priced growth stocks. This is partly a reflection of risk aversion among investors in the present context of mounting challenges posed by the expected aggressive tightening by the Fed and the uncertainties arising from the Ukraine war that is getting prolonged,” he mentioned.

“Dollar index at 103 indicates flight to safety and this implies that FPIs will continue to sell in this market. Sell on rallies is likely to be the texture of this market in the near term. Long-term investors who can ignore short-term gyrations in the market can buy high quality stocks in banking and IT which are depressed due to FPI selling,” Vijayakumar added.

Accumulate basically sound stocks on each dip and maintain for the long run features

Mohit Nigam, Head – PMS, Hem Securities mentioned, ” Indian benchmark indices made a spot up opening right this moment and closed over 1% greater. According to us, indices had a powerful help at 17,000 and present correction in lot of scripts has created engaging shopping for alternatives. Healthy correction and euphoria surrounding the most important IPO has strengthened the investor sentiments thus, pulling the markets up. In this sort of market, traders ought to accumulate basically sound stocks on each dip and maintain for the long run features.”

Take cautious bets

“Key Indian equity markets opened higher on Thursday despite weakness in Asian stocks ahead of expiry of April series of Future and Option. The gains were mainly led by two factor — Risk appetite improved globally; and Index heavy weighted stocks are gaining such as HUL, Infosys, and Reliance Industries. Investors are advised to take cautious bets amid concerns over global geopolitics, inflation and monetary tightening by central banks,” mentioned Piyush Chajed, Research Associate, Choice Broking.

(The suggestions on this story are by the respective analysis analysts and brokerage companies. Financial Express Online doesn’t bear any duty for his or her funding recommendation. Capital markets investments are topic to guidelines and laws. Please seek the advice of your funding advisor earlier than investing.)

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