Dear
Trader…
On the first day of the week, the Indian stock market
started trading with a rally after a significant decline last week. Foreign
funds, which have been booming for a long time, are seeing heavy sell-offs last
week with volatility on the back of a worrying rise in the transition of corona
to India.
Markets traded with optimism throughout
the day, as India’s Gross Domestic Product (GDP) grew by 0.4 per cent for the
October-December quarter (Q3) of current fiscal (FY21). The GDP growth has
returned the economy to the pre-pandemic times of positive growth rates. It is
also a reflection of a further strengthening of V-shaped recovery that began in
Q2 of 2020-21, after a large GDP contraction in Q1 followed one of the most
stringent lockdown imposed by Government relative to other countries.
Sentiments remained up-beat as data
released by the Ministry for Commerce and Industry showed that the core sector
index, which measures output of eight infrastructure industries, rose
marginally by 0.1 per cent in January, indicating a wobbly recovery from the
pandemic shock. Output in five of the eight crucial sectors fell on a
year-on-year (YoY) basis.
The Indian stock market is still in an overbought
position as the global and local Corona case continues to weigh on the stock.
Volumes on the NSE
were below recent averages. Among sectors, Media, Auto, Metals, Banks, Pharma
gained the most while PSU Bank index ended in the negative.
In
addition, Nifty future managed
to end the session trade above 14808 levels. Nifty future has given a V-shaped
recovery from the recent low of 14550 levels and rebounded from there over the
last few sessions – this rally has been supported by the return of net buy flows
from domestic institutional investors after a gap of nearly 3 months given the
backdrop of elevated redemptions from domestic mutual funds over the last few
months, this turn in flow environment speaks to ebbing of redemption pressures so
traders should continue with “buy on dips” in the index trade while stocks may
continue to see the swings on both sides.
The Nifty future has to continue to hold above 14808 point to witness an up move towards 14808 then 14878 levels while on the downside key support exists at 14770 then 14707 levels.
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