14622In view of reduced inflation and expenses, will it be right to invest in IT stocks?

Indian equity indices, Sensex and Nifty ended Tuesday’s volatile session higher led by the last hour recovery.

The Sensex jumped 584 points or 1.16% to end at 51,025, while the NSE’s Nifty ended 142 points or 0.95% at 15,098.

Financials and private banks did most of the heavylifting today, and managed to keep the equity indices in the green.

HDFC Bank, ICICI & Kotak Bank helped Nifty Bank register a gain of 1.7%

SBI Life was the top Nifty gainer, the stock rose 5%. Kotak Mahindra Bank, HDFC Bank, Tech Mahindra, HDFC, ICICI Bank, HDFC Life, TCS, Bajaj Finance, Grasim Industries, Asian Paints and HCL Technologies also rose between 1.6-3% in trade today.

On the flipside, BPCL, Tata Steel, GAIL India, Indian Oil, Power Grid, Tata Motors, JSW Steel, NTPC, Cipla, ONGC, Hindalco and Dr Reddy’s Labs were among the top losers.

Here’s how analysts expect markets to trade on Wednesday

Manish Shah, Founder, Niftytriggers.com

On Tuesday, Nifty rallied from its lows and took its support at 14,860 seems to be holding. The pattern is interesting and is a dead giveaway that the Nifty wants to move higher. We consider decline from the high as a flag pattern and this is a continuation pattern.

Nifty saw a long-tailed candled that has closed at the high of the day. This is a dead giveaway that Nifty wants to move higher. The pattern gives us the best reward to risk trades after a prolonged period of ambivalence. Tomorrow is the last day of weekly expiry and we can expect Nifty rallying towards 15,500 and above that to 15,750 before the end of march expiry.

Support at 14,860 holds for the time being and this should be a critical decision point. Bank Nifty could be the catalyst in sector rotation.

Shrikant Chouhan, EVP & Technical Research Analyst, Kotak Securities

The market continued to remain rangebound, trading between 15,150/51,200 and 14,900/50,200 levels.

However, towards the end Nifty IT and Bank Nifty helped the broader market to move higher. To a greater extent, the broad-based buying in the technology sector has helped the market to close higher compared to the financial sector. From the financial sector, private banks topped the day, while the PSU banks closed in the negative territory.

The Nifty and Sensex have formed bullish reversal formation by closing at the highest point of the day. On the day of the weekly expiration of Index options, we could see a bullish continuation if these indices manage to hold above 15,150/51200 levels. Above, 15,150/51,200 the market would face the biggest hurdle at 15,270/51,750. If the index falls below the level of 15,000/50,750, the bullish pattern would fail.