After a negative starting gap, markets finish higher; the Nifty closes below 22,500, up 2.3% for the week

On May 17, the Indian equities indexes began the day down but ended the day higher. The Nifty 50 closed the day’s trading at 22,466.10, having gained 62 points, or 0.28%. Sensex ended the day’s trade at 73,917.03, up 253 points, or 0.34%. The Nifty 50 was pushed higher by M&M, Reliance Industries, ITC, Kotak Mahindra Bank, and Ultratech Cement; the main gainers were BPCL, JSW Steel, Grasim Industries, and Ultratech Cements. The index of volatility decreased by 1.05%.


Higher sectoral indexes

The Nifty Midcap 100 kept up its strong performance, finishing 451.60 points, or 0.88% higher, at 51,604.90 to end the day. Still, Nifty Bank ended the day at 48,115.65, down 139 points, or 0.29%.

In terms of sectors, the indexes were headed higher by metal, auto, and consumer durables stocks. Small- and mid-cap companies finished higher on the overall market.

Rally was seen in the military and railroad equities thanks to the Q4 results and a robust order book. A positive outlook after the election also encouraged buyers. Due to Election Day, markets will not be open on Monday. Thanks to short covering and encouraging global signals, Nifty managed to maintain its pace and rise by more than 1% over the previous two days. Markets will respond on Tuesday to Phase 5 voter participation as well as economic events such as China Loan Prime rate and Europe Inflation data that are expected over the weekend, according to Siddhartha Khemka, Head of Retail Research at Motilal Oswal Financial Services.

As of May 16, 2024, domestic institutional investors had been supporting the market with net purchases of Rs 32,416 crore, while foreign institutional investors had maintained their selling binge, with net sales hitting Rs 37,149 crore. “The Nifty established base support at 22,250 levels, settling at 22,466 for the week,” said Prabhudas Lilladher Head of Advisory Vikram Kasat.

The Technical Aspect of Nifty

The most significant finding for Nifty is that it closed above the 50-day exponential moving average (50 Day EMA), which is a critical resistance zone. As a result, we think it will probably try the next resistance levels, which are 22,500 and 22,750–800 on the upper side. The Nifty now finds support at levels 22,350 and 22,200–250. On the upward side, the Nifty’s immediate barrier is at the 22,500 mark, and the 22,750–800 levels (previous ATH) represent the next significant resistance zone. Tejas Shah, Technical Research, JM Financial & BlinkX, said that overall, Nifty is anticipated to be volatile with a bullish tilt in the short term, staying between 22,200 and 22,800.

Bank Nifty

The Bank Nifty had a bad start, but it bounced back and ended the day higher. “From a short-term perspective, we anticipate the retreat to extend towards 48320–48700. The hourly momentum indicator has crossed higher, indicating a purchase signal. For long positions, the trailing stop-loss should be maintained around 47500, according to Jatin Gedia, a Sharekhan by BNP Paribas technical research analyst.

Impact on Rupee

“The rupee saw good trading, closing at 83.35 after rising by more than Rs 0.17. This increase was fueled by the Indian stock market’s optimistic response to good vote totals and optimism that the existing administration would continue in office. The rupee’s stability has been aided by inflows from Domestic Institutional Investors (DII), and the RBI’s stringent zero-speculation rules have further restrained any possible fall. The rupee is predicted to move in a favorable range in the next sessions, between 83.10 and 83.55, according to Jateen Trivedi, vice president and research analyst at LKP Securities for commodities and currencies.

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