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Sensex (60345) / Nifty (18004)

The way Nifty closed beyond 18000 on Tuesday, market participants were a bit complacent and took US macro data for granted. But US markets took a complete nosedive in the evening post the rising inflation data. Due to this brutal knock, last 3-4 day’s gains in US markets went for a toss. Needless to say, we reacted yesterday morning with a massive gap down towards 17800. However, after an opening blip, the banking came for a rescue and then (except IT) others too started participating in the recovery. In the process, we not only managed to pare down significant portion of losses but also reclaimed the 18000 mark on a closing basis.

Yesterday’s session has clearly validated the level of strength our domestic market has as compared to the global peers. Despite such unfavourable environment, we remained firm and managed to pull the market higher back into the safe terrain. Now unless there is major aberration on the global front, we are good to test 18200 - 18350 first and then record highs. On the flipside, 17900 - 17800 now becomes a sacrosanct zone. This rally is strongly back by the financial space and hence, it provides credence to the move

Nifty Bank Outlook (41405)

Bank Nifty as well started with a gap-down opening however mighty bulls took this as an opportunity and right from the word go the prices started moving higher. In this process, the bank index not only recovered its lost ground of more than 500 points but went on to add strong gains of 1.30% closing tad above 41400 levels. Things were looking extremely bleak at the opening however the way we closed definitely indicates that the bulls are in a dominating place and they are not willing to give up so soon.

The ongoing rally is mostly driven by the banking space and yesterday as well it showed its mettle. We have been advocating for the last few weeks that any dip should be taken as a buying opportunity and we reiterate the same as we see this space heading towards the all-time high levels and beyond in the very near term. Yesterday many individual stocks from this space gave a strong up move and one should ideally focus on such counters for outperforming moves. As far as levels for the bank index is concerned, immediate support is at 40900 - 40750 levels whereas resistance is at 41600 - 41830 levels.

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