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In the coming session, volatility is likely to be high on account of the derivative expiry on next week. However, we expect the index to maintain higher high - low hence trader needs to be cautious at current level.
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Dear Trader…
As expected after a gap up opening extending their record braking rally, the BSE Sensex and the Nifty Futures hit a record high of 50184.01 points and 14765.45 points, respectively, on the back of robust buying by foreign funds.
the Nifty and the Sensex have managed to maintain their bullish mood with Record break rally and Sensex touched the historical levels of 50,000 today for the first time ever is a telling sign of economy and markets shifting orbits on broad-based recovery and better days ahead on the strength of FPI flows into our market and heightened hope from the upcoming Budget, promised to be “like never before” by the Finance Minister.
Indian markets have been witnessing strong momentum over the past few months on the hopes of a faster economic recovery after the pandemic lockdown.
Markets will also look to the Union Budget on the 1st of February and the ongoing Q3FY2021 results season for further cues. However valuations at current levels are expensive. While the markets may be expensive at current levels we believe that India equities will command a premium given that we are still in the early part of an earnings recovery cycle where multiples tend to be higher.
We believe that liquidity will keep coming into India given zero interest rates in developed countries and continued monetary stimulus by the central banks globally. Therefore we continue to remain positive on the Nifty from a medium to long term perspective despite any possible short term volatility in the markets. Corrections if any are likely to be short lived and should be used as an opportunity to buy into the market from a long term perspective.
We’ve entered a super-cycle for Indian equities, like we had seen in the year 2003. We see high possibility of decisive reforms from the government, accelerated earnings growth and a continued liquidity flow chasing growth, in a period of weakening US Dollar. A fresh up cycle has resumed for small and midcaps as well, after a long consolidation in 2018, 2019 and large part of 2020.
In the coming session, volatility is likely to be high on account of the derivative expiry on next week. However, we expect the index to maintain higher high - low hence trader needs to be cautious at current level.
The next important key resistances are placed at 14676 levels, which could offer for the market on the higher side. Sustainability above this zone would signal open the door for a directional up move with immediate resistances seen at 14707 -14717 levels. Immediate support is placed at 14533 - 14474 levels.
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