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Market Closing Commentary

The benchmark indices extended gains for the fourth consecutive session on April 7, supported by a marginal cooling in crude oil prices from $111.80 to $109 per barrel and strong buying interest in IT stocks, even as volatility persisted due to Nifty’s weekly expiry. At close, the Sensex advanced 509.73 points, or 0.69%, to settle at 74,616.58, while the Nifty gained 155.40 points, or 0.68%, to close at 23,123.65.

Sectorally, barring Consumer Durables and PSU Banks, all other indices ended in the green. The Information Technology index rose 2.5%, the Metal index gained 1.5%, Realty advanced 1.7%, and the Media index added 1%. The Nifty Midcap index edged up 0.3%, while the Smallcap index ended flat. Focus now shifts to key global and domestic triggers, including the deadline set by U.S. President Donald Trump for a potential Iran deal at 8 PM ET, and the RBI monetary policy outcome scheduled for April 8.

Nifty Outlook                            

 The index formed a bullish candlestick pattern with a higher high and a higher low for the second session in a row signaling continuation of the pullback from the oversold territory. Volatility is likely to remain elevated in the near term, amid geopolitical tensions and higher crude oil prices.

Immediate support is placed at yesterday’s low of 22719, index sustaining above the same will keep the current pullback intact and will open further upside towards the recent high of 23,450 levels in the coming sessions. A drop below 22,700 would invalidate the current pullback and could trigger further downside, potentially dragging the index toward last week’s low near 22,200. Key short-term support is placed at 22,000–21,800 zone being the trendline support joining last 2-year lows and the 200 weeks EMA.

Index is showing initial sign of pause in the current downtrend. However, index needs to form a sequence of higher highs and higher lows in the daily chart, along with a sustained close above 23,465 to signal any reversal in the downward trend.

Bank Nifty Outlook

Bank Nifty formed a third consecutive bullish candlestick pattern with a higher high and a higher low signaling continuation of the pullback from the extreme oversold territory. Index witnessed a strong pullback in the second half to close the session on a positive note.

Volatility is likely to remain elevated in the near term, amid geopolitical tensions and higher crude oil prices, which continue to weigh on overall market sentiment. Going ahead, a follow through strength above Tuesday’s high 52,800 will open further upside towards 53,500 levels. Failure to do so will lead to consolidation in the range of 50,000-52,700.

On the downside weakness below the psychological 50,000 levels will signal extension of the decline towards the 200 weeks EMA placed around 48,900 levels in the coming weeks. For any meaningful pause in the ongoing downtrend, the index needs to establish a sustained pattern of higher highs and higher lows in the daily chart, along with a close above recent high of 54,150.

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