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Indian markets witnessed a smart rally on back of positive global cues and early arrival of monsoon giving hopes of slowdown in inflation.  Nifty opened gap up and rose for third consecutive day to close with gains of 309 points (+2%) at 16,661 levels. Broader market outperformed with Nifty Midcap 100 up 2.4% and Smallcap 100 up 3.1%. All sectorial indices were in positive territory with Realty and Consumer Durable being top gainers up more than 4% each. IT, PSU Bank and Media were up more than 3% each. India VIX cooled off by 7% at 19.98 levels.

On global front, European and Asian markets edge higher following US market rally on last Friday on the back of rise in consumer spending in US in April and the slower uptick in US inflation data. Sentiments were further improved after China eased Covid restrictions in Shanghai and Bejing and offered a slew of economic support. On the other hand, US markets are closed today on account of Memorial Day.

During the week, investors would take cue from US non-farm payroll data on the global front along with Auto monthly sales numbers and Manufacturing PMI data on the domestic front. The government will announce GDP numbers on 31 May 2022 which would also provide direction to the market. Though the markets have bounced back, inflation and central banks action globally would hold the key for the sustenance of this momentum. Nifty has formed a Bullish candle on daily scale and needs to hold above 16666 zones for an up move towards 17000 zones whereas supports are placed at 16400 zones. India VIX has cooled down sharply to below 20 levels which is supporting the bullish tone in the market.