The domestic blue-chip equity indices Sensex and Nifty closed over 1% higher on Friday, driven by IT stocks, following a larger-than-expected drop in U.S. unemployment claims that eased recession fears in the world’s largest economy. The NSE Nifty 50 index rose 1.04% to 24,367, while the S&P BSE Sensex added 1.04% to 79,705.9.
However, on Monday, both indices may face domestic volatility due to fresh claims by Hindenburg Research against SEBI Chairperson Madhabi Puri Buch’s family in the Adani controversy. When trading resumes on Monday morning, an initial knee-jerk reaction might occur as major investors may adopt a cautious approach, keeping positions light until more clarity emerges.
Despite the potential volatility, analysts do not expect a significant impact on the stock market. Kranthi Bathini, Director of Equity Strategy at WealthMills Securities, stated, „By and large, this is not going to have a major impact on the market on Monday morning. The market has been behaving in a very matured fashion. It is not as if the sky is going to fall down.“
Analysts provided insights into the market pulse, with Tejas Shah from JM Financial & BlinkX highlighting that important technical levels were tested both on the upside and downside during the week. Hrishikesh Yedve from Asit C. Mehta Investment Intermediates suggested that a buy-on-dips strategy should be adopted for Nifty, with key support levels at 24,000.
Looking at global markets, the S&P 500 ended higher on Friday, with the technology sector leading the index’s gains. European shares also rose, with healthcare stocks providing a boost. The tech view for Nifty indicated a Hammer candle on the weekly chart, suggesting a potential rally towards specific levels.
Momentum indicators such as Moving Average Convergence Divergence (MACD) showed bullish trade on certain stocks like Avanti Feeds and Trent, while others like Ramco Cements and Jubilant Food displayed bearish signs. The most active stocks in value terms included Trent, HDFC Bank, and NBCC, while Vodafone Idea and Suzlon Energy were among the most active stocks in volume terms.
Stocks like Kfin Technologies and Avanti Feeds witnessed strong buying interest, while Equitas Small Finance Bank hit their 52-week lows, signaling bearish sentiment. Overall, market breadth favored bulls, with 2,283 stocks ending in the green compared to 1,626 in the red.
In conclusion, the domestic blue-chip equity indices Sensex and Nifty continue to navigate through various challenges and opportunities, with market participants closely monitoring global and domestic developments to make informed investment decisions.