The market ended higher in the volatile session on January 7 amid buying seen in the bank, metal, FMCG and oil & gas stocks.
Market started the day gap-up and extended the gains amid mixed global cues, but selling at higher level erased the intraday gains in the afternoon session, however, buying in the last hour of trade helped the indices to close the day in the positive territory.
At close, the Sensex was up 142.81 points or 0.24% at 59,744.65, and the Nifty was up 66.80 points or 0.38% at 17,812.70.
For the week, BSE Sensex and Nifty50 added 2.5 percent and 2.6 percent, respectively.
“Domestic equity markets started 2022 on a strong note with majority indices moving in the north direction this week. Despite rising covid cases in India and globally, the markets moved higher as the severity of Omicron variant seems to low. BSE 30 and NSE 50 index inched up by 2.6% each during the week,” said Shrikant Chouhan, Head of Equity Research (Retail), Kotak Securities.
“After witnessing correction in recent weeks, BSE Bankex index staged a strong comeback with returns of 6.5% in this week. Defensives like BSE IT and BSE Healthcare gave negative returns during the week.”
“FII turned out to be net buyer in the January month till date. The 10 year US treasury yield moved higher during the week and crude oil prices (Brent crude) increased beyond the USD 80 mark and is inching closer to the October 2021 highs.”
“Inflation concerns, higher interest rate scenario and increasing covid cases are some of the challenges for the market. Domestic markets over the next one month will closely track the upcoming quarterly results and the Union Budget,” he added.
Grasim Industries, ONGC, Hindalco Industries, HDFC Life and Shree Cements were among the top Nifty gainers. Losers were M&M, Bajaj Finserv, L&T, Bajaj Finance and HDFC.
Among sectors, except Nifty auto and pharma, all other indices ended higher with metal, FMCG, bank and energy indices up 0.5 percent each.
Broader indices outperformed the benchmarks with BSE midcap and smallcap indices rising 0.5 percent and 0.4 percent, respectively.
Stocks and sectors
On the BSE, oil & gas index added 1 percent, while FMCG, bank and metal indices up 0.5 percent each. However, capital goods, auto and healthcare indices ended in the red.
A long build-up was seen in ONGC, India Cements and GSPL, while there was a short build-up in NBCC, Titan Company and City Union Bank.
Among individual stocks, a volume spike of more than 300 percent was seen in IRCTC, India Cements and Whirlpool of India.
More than 450 stocks, including Page Industries, India Cements and Asian Paints hit a 52-week high on the BSE.
The Nifty formed a spinning top sort of candle on daily while a strong bullish candle on weekly scale which indicates buying interest is intact in the market but absence of follow up is also seen at higher zones.
“The Nifty has to hold above 17,777, for an up move towards 18,000 and 18,200, whereas support shifts higher to 17,600 and 17,500 zones,” said Chandan Taparia, Analyst-Derivatives, Motilal Oswal Financial Services.
Outlook for January 10
Gaurav Ratnaparkhi, Head of Technical Research, Sharekhan by BNP Paribas:
For the last couple of sessions, the index is consolidating near this key Fibonacci level. The hourly Bollinger Bands have become flat thus suggesting that the consolidation can continue for some more time. The overall structure shows that this is a healthy consolidation, which will prepare the setup for the next up move.
So for the next few sessions, sideways action can take place in the range of 17650 – 18000. On the downside, 17650-17600 will provide cushion for any minor degree dip whereas on the higher side, 18000 mark is expected to keep the rise in check for the short term.
Ajit Mishra, VP – Research, Religare Broking:
Markets are likely to consolidate further after the recent surge and it would be healthy. Meanwhile, volatility is likely to remain high, citing mixed global cues and COVID-related updates. Besides, upcoming macroeconomic data (IIP, CPI, and WPI) and the beginning of the earnings season could further add to the choppiness.
We recommend continuing with a positive yet cautious approach and preferring hedged positions.
Mohit Nigam, Head – PMS, Hem Securities
On technical front, Nifty’s immediate support and resistance can be 17,500 and 18,000 respectively. While for Bank Nifty 37000 and 38200 may act as immediate support and resistance.
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