Led by positive global cues, Indian benchmark equity indices closed over 1.5% higher on Friday, as strong U.S. economic data eased recession fears in the world’s largest economy. The NSE Nifty 50 index ended 1.65% higher at 24,541.15 and posted a 0.7% weekly gain, while the S&P BSE Sensex added 1.68% to 80,436.84 and was 0.9% higher for the week.
Analysts have been closely monitoring the market pulse to gauge the direction of the market. Jatin Gedia of Sharekhan noted, „On daily charts, we can observe that Nifty has held on to the 40-day average (24150) and has witnessed a sharp pullback. The index is now heading towards the 24626 – 24650 zone where the 61.82% Fibonacci retracement level and the gap area formed on the 5th Aug is placed. Considering the sharp pullback, we change the short-term trend to sideways from negative and the range of consolidation is likely to be 2400 – 24200.“ Rupak De, Senior Technical Analyst of LKP Securities, added, „Nifty rallied above 24500 after days of consolidating within a 400-500 point range. In the near term, Nifty may continue consolidating within the 24300-24550 range. Only a decisive move above 24550 could trigger a directional up move in the index.“
Looking at the global markets, U.S. stocks ended higher on Friday, extending their biggest weekly percentage gains of the year as worries of an economic downturn eased and investors focused on the Jackson Hole Economic Symposium next week. The S&P 500 and the Nasdaq notched their seventh straight session of gains, as stocks recouped losses from a tailspin two weeks ago. The S&P 500 gained 0.20% to end at 5,554.56 points, while the Nasdaq Composite gained 0.21% to 17,631.81. The Dow Jones Industrial Average rose 0.24% to 40,658.68.
In Europe, shares ended the week with healthy gains as upbeat risk sentiment prevailed globally following a slew of U.S. data. The pan-European STOXX 600 index rose 0.3% on the day, still hovering at its two-week high and logging its best week since May 6. London’s FTSE 100 was the weakest among its major European peers, ticking 0.4% lower after British retail sales rose 0.5% in July, in line with forecasts. Italy’s FTSE MIB outperformed peers with a 2.2% gain.
From a technical perspective, Nifty ended Friday’s session 397 points higher to form a long bull candle on the daily chart with lower shadow and crossed the 21-DEMA placed at 24,365 levels. Nagaraj Shetti of HDFC Securities noted, „Nifty has now moved towards hurdle area of previous huge opening downside gap of 5th Aug and the said down gap is expected to be filled soon around 24700 levels. The next upside to be watched are around 24700 and 25000 in the near term. Immediate support is at 24350 levels.“
In terms of stock movement, momentum indicator Moving Average Convergence Divergence (MACD) showed bullish trade on the counters of Welspun Corp, Aditya Birla Capital, Firstsource, DLF, Equitas Small Finance Bank, and Glenmark Pharma among others. On the other hand, the MACD showed bearish signs on the counters of Adani Wilmar, Adani Enterprises, Pfizer, J&K Bank, Network18 Media, and Muthoot Finance among others.
Overall, market breadth favoured bulls as 2,414 stocks ended in the green, while 1,527 names settled in the red. It is important to note that recommendations, suggestions, views, and opinions given by the experts are their own and do not represent the views of the Economic Times. Investors should conduct their own research and analysis before making any investment decisions.