D-Street shrugs off Covid woes, here’s how markets may trade on Thursday

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For the third consecutive day, benchmark indices Sensex and Nifty ended the day in the green, adding 1.5% of gains at close. While Sensex soared 789 points, Nifty ended the day above the 14,850 mark.

Despite caution amongst global peers ahead of the FOMC meet, the benchmark opened gap-up and continued to surge higher. The rebound is all the more surprising, given that foreign institutional investors have been net sellers of Indian equities this month and even as market experts warned that the earnings of many companies could be hit by the second wave of Covid-19.

The rally has surprised most traders and fund managers, who were expecting the market to slide given the restrictions announced by many state governments in light of the impact of the second wave of COVID-19.

Financials led the market rally with Nifty Bank rising 3% and all constituents closing in the positive terrain.

Among sectoral indices, Nifty Bank, Nifty Auto, Nifty Financial Services and Nifty IT gained the most while metal, pharma and realty indices were the laggards.

On the Nifty50, Bajaj Finance, IndusInd Bank, Eicher Motors, Bajaj Finserv and Kotak Mahindra Bank were the top gainers, while Britannia Industries, Hindalco Industries, Nestle India, Divi’s Laboratories and HDFC Life Insurance were the top index losers.

BSE midcap and smallcap indices also rose 0.7-1% in trade today.

Strong Q4 results and vaccine optimism buoyed domestic market sentiments.

Here’s how experts see markets trading on the expiry day:

Manish Shah, Founder, Niftytriggers.com

Nifty closed the day sharply higher. It was a high conviction close, a sort of candle that we were looking for. The location and the context in which the candle appeared seems to signal a massive comeback by the bulls. Nifty also closed above its 50 period moving average.

The resistance zone for nifty is at 14980-15000 and as tomorrow is the last day of expiry there could be selling around this level maybe for a day or two. A break above 14980-15000 will signal an onward upside towards 15310-15400 for May Expiry. Support for Nifty is at 14650-14660 any declines to this zone is a buying opportunity.

Shrikant Chouhan, EVP, Equity Technical Research at Kotak Securities

Technically, the Nifty has formed strong bullish candle.. After a long time the index managed to closed above 50 day simple moving average (SMA) mark which is broadly positive for the market. However, intraday chart suggest, market is overstretch and it may take a temporary pause near 14925 levels.

We are of the view that, the larger texture of the market is positive and ideal strategy should be to buy on dips rather than chasing Nifty at higher levels. In the near future, 14750-14700 levels should act as an important support for the Nifty, trading above the same we can expect uptrend continuation of wave up to 14925-15000.