The broader indices touched a fresh all-time high and performed in line with the main indices, led by a strong monsoon, and supportive data points which indicate a rate cut by the Fed in the upcoming policy meet.
This week, BSE Sensex rose 1,707.01 points or 2.10 percent to finish at 82,890.94, while the Nifty50 index added 504.35 points or 2.02 percent to close at 25,356.50.
Among broader indices, BSE Smallcap index rose 2 percent, the Largecap index added nearly 2 percent and the BSE Midcap index jumped 1.5 percent.
On September 12, the Nifty50 and BSE Sensex touched a fresh record high of 25,433.35 and 83,116.19, respectively.
On the sectoral front, except Oil & Gas (Down 2.6 percent), all other sectoral indices ended in the green with Nifty FMCG, Nifty Information Technology, Nifty Media indices gaining nearly 3 percent each.
During the week, Foreign institutional investors (FIIs) bought equities worth Rs 15199.6 crore, however, Domestic Institutional Investors (DII) bought equities worth Rs 2444.19 crore. However, for the month, FIIs purchased equity worth Rs 16,600.88 crore and DIIs bought equities worth Rs 7,990.18 crore.
"Indian markets overcame last week’s negative sentiments stirred by SEBI's deadline over FII's disclosure norms and recession fears in the US. Initial cautiousness among market participants was also influenced by a slew of macro-economic data points like US inflation & jobless claims, domestic inflation, and manufacturing data. Further, comments from the BoJ of a potential rate hike if inflation remains elevated also led to cushion in the air," said Vinod Nair, Head of Research, Geojit Financial Services.
"Despite volatility, DIIs and FIIs flows remained positive as a strong monsoon, and an expectation of an uptick in demand during festive season drove investor sentiment. US inflation eased marginally, and the job market continued to see a cooling off. Indian inflation largely remained steady, while July IIP saw an uptick. The market hit a new high as the rate-cut optimism globally (ECB & US Fed) has provided a positive impetus across the global markets."
"Going ahead, market focus will be on the upcoming FOMC meeting next week, while domestic market direction will also be influenced by domestic corporate earnings, which are forecasted to improve in Q2 on a QoQ basis," he added.
The BSE Small-cap index added 2 percent with Hardwyn India, Panacea Biotec, Sadhana Nitrochem, Cressanda Solution, Renaissance Global, Jubilant Pharmova, Sundaram-Clayton, Zaggle Prepaid Ocean Services, Ester Industries, Century Textiles and Industries rose between 20-30 percent.
On the other hand, Abans Holdings, Granules India, MPS, VST Industries, TV Today Network, Jagran Prakashan, Cera Sanitaryware, Phoenix Mills and Ddev Plastiks Industries fell between 7-21 percent.
Where is Nifty50 headed?
Amol Athawale, VP-Technical Research, Kotak Securities:
The short-term market texture is positive but due to temporary overbought conditions, we could see range bound price action in the near future. For the short term now, 25225-25000/82500-82000 would be the key support zones while 25500-25700/83500-84000 would be the crucial resistance areas for the bulls. However, below 25000/82000 uptrend would be vulnerable.
For Bank Nifty as long as it is trading above 50 day SMA (Simple Moving Average) or 51350 the bullish formation is likely to continue. On the higher side, it could move up to 52250-52700. On the other side, below 50 day SMA or 51350 traders may prefer to exit out from the trading long positions.
Jatin Gedia – Technical Research Analyst at Sharekhan by BNP Paribas
The price action is along expected lines and can continue over the next couple of trading sessions. The undertone is bullish, and it is likely to resume its upmove once the consolidation phase is complete. The upside is likely towards 25500 - 25700. Support is placed in the zone of 25200 – 25150.
Positive crossover on the daily and hourly momentum indicator supports the upmove in the case of Bank Nifty. The level of 52000 is acting as a stiff resistance and a move beyond it could lead to a rally towards 52500 – 52600. Support zone is 51500 – 51400.
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