Market posts smart gains, more than 50 small-caps fetch double-digit returns

In a week of sustained volatility, the Indian equity markets posted handsome gains and closed over 1 percent higher, riding on inline earnings, FII support, and shrugged off negative cues from global peers.

The BSE Sensex gained 973.61 points or 1.59 percent to end at 62,027.9, and the Nifty50 added 245.8 points or 1.36 percent to close at 18,314.8. For the week, the BSE Largecap and Midcap indices jumped 1.3 percent each, while the Smallcap index added 1 percent.

“Over the week, the domestic market was influenced by positive global market trends that revolved around the US inflation numbers and the jobs data. Moderation of US inflation below 5 percent provided a welcome relief for investors, indicating that the Federal Reserve’s efforts to raise interest rates have effectively managed inflation levels. However, weak macroeconomic data, such as elevated jobless claims and a modest increase in producer prices, raised concerns about slower economic growth, dampening market sentiment towards the latter half,” said Vinod Nair, Head of Research at Geojit Financial Services.

“Oil prices continued to slide amid demand concerns in the US and China. The consistent inflow of funds from foreign institutional investors due to falling US bond yields and a weakness in the dollar helped control the downward pressure in the domestic market. India’s inflation for April, which has moderated to 4.7 percent, will have a positive impact on the market next week,” he said.

Among sectors, the Nifty Auto index added 4.2 percent, the Bank index 2.6 percent, and Realty index was up 1.7 percent, while the Nifty PSU Bank index fell 4 percent.

The BSE Smallcap index added 1 percent with Jai Balaji Industries, Brightcom Group, Onward Technologies, Manorama Industries, Neuland Laboratories, Stylam Industries, Capacite Infraprojects, Sasta Sundar Ventures abd Kirloskar Brothers rising 20-34 percent.

On the other hand, TCNS Clothing Co, Indiabulls Real Estate, Rail Vikas Nigam, Future Consumer, Gujarat Ambuja Exports, Indian Bank, Sterling Tools, D-Link India, Faze Three, Tatva Chintan Pharma Chem and Satin Creditcare Network fell 10-23 percent.

“It was a narrow-range week for the market as prices were indicating a mixed reaction but the buying momentum was intact. The Nifty started the week with a bullish candle and up-move with muted pace for most of the week has been witnessed. It eventually closed higher by 1.40 percent or 166 points at 18,256 levels,” said Rohan Patil, Technical Analyst, SAMCO Securities.

“Overall, it is an optimistic month so far as Nifty Bulls are enjoying a rally from their lower levels of 17,600. Prices have shown a strong breakout from the prior resistance zones and gained close to 4 percent in just three weeks,” he added.

The Nifty has broken out of its intermediate resistance which was placed at 18,100 levels and witnessed a horizontal trendline breakout on the daily time frame, according to Patil. “Prices have just shown a single candle retracement and trend resumption candle signal the bulls are in control of the momentum and this may prolong towards higher levels. Having moved above the hurdle and the overall positive chart pattern indicates the next upside for the Nifty between 18,500 and 18,600 in the coming week.”

He estimated immediate support for the Nifty at 18,000 levels. If the 18,000 level is breached, then 17,850 will be the level to watch out for, he said.

The Foreign institutional investors (FIIs) bought equities worth Rs 7,750.35 crore, while domestic institutional investors (DIIs) sold equities worth Rs 1,261.98 crore.

In the month till now, FIIs bought equities worth Rs 13,278.11 crore and DIIs sold equities worth Rs 3,997.23 crore.

Where is Nifty50 headed?

Siddhartha Khemka, Head – Retail Research, Motilal Oswal Financial Services:

Markets on Monday will react to India’s inflation data and the Karnataka election outcome. Market has now been consolidating for the last four days and is awaiting fresh triggers for the next leg of the rally as the structure of the market remains positive. Investors would continue to keep an eye on economic data to be released next week.

Amol Athawale, Technical Analyst (DVP), Kotak Securities:

On weekly charts the index has formed a long bullish candle indicating the continuation of the uptrend. As long as the index is trading above the 10-day SMA or 18,200, the positive sentiment will sustain. Above 18,200, the index is likely to move towards 18,450-18,550. On the flip side, bulls may prefer to exit from the long positions if the index trades below 18,200 and on further downside it may slip till 18,000.

For the Bank Nifty, 43,500 would be the sacrosanct level to watch out, above which it could rally till 44,000-44,300. On the other hand, a quick short term correction is possible if it trades below 43,500 and below the same it could slip till 43,000-42,800.

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